1951-11-01

UNITED NATIONS FORCES


Hon. Brooke Claxton (Minister of National Defence):: Mr. Speaker, I am sure that hon. members will allow me the privilege of calling to the attention of the house the presence of sailors, soldiers and airmen of nineteen of the United Nations forces lighting in Korea. They represent Australia, Belgium, Colombia, Canada, Ethiopia, France, Greece, India, Luxembourg, The Netherlands, New Zealand, Norway, the Philippine islands, the republic of Korea, South Africa, Thailand, Turkey, the United Kingdom, and the United States. Every one of these men is a veteran of the fighting in Korea.
They are sitting in the diplomatic gallery because they are representatives of their respective countries, but more than that they are living symbols of the unity of the United Nations in standing against aggression. We can see back of each one of these men the tens of thousands of their comrades-sailors, soldiers and airmen who are fighting with us; we can see back of them the millions of their populations who are standing together for the first time in the history of the world because they love and believe in freedom and are willing to preserve it at any price.
Because of what they are and what they have done I am sure that you would wish me to extend to the honoured guests of our country today a most hearty welcome, and to ask them to carry back to their comrades and to the peoples of their countries our good wishes and our determination to stand together to see that the cause to which we have set our hands is carried through to a successful conclusion in order that we may have that peace we are all striving for and which the United Nations are putting forth every effort to preserve.


Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, I think it is perhaps appropriate that as leader of the opposition I should join in the assurances that this house extends to the veterans of Korea who are in the diplomatic gallery today. One of the features of our system, in fact what we are fighting to preserve, is the right of free speech
and the right and duty to express ideas from different points of view as to the manner in which our democracies can best advance their course.
It is a particularly happy thing for us to see these gallant men who have themselves offered the highest measure of service so that, here in Canada and in the other free nations from which they come, legislative bodies can meet in freedom to discuss the affairs of state. No men could be higher qualified to sit in an assembly where free men meet to deal with public business. While under our system we cherish the right to differ in regard to the way that things shall be done within our own lands, I am sure that every hon. member agrees that there is complete unity in the expression of our respect to them and our hope that throughout the years ahead they may enjoy the memories of the service they have performed.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, I am sure that all members of all political parties in this house join with the Minister of National Defence (Mr. Claxton) and the leader of the opposition (Mr. Drew) in the sentiments they have just expressed, and I am equally sure that the people of Canada do so as well. I think this is somewhat of an historic occasion because sitting in the gallery are men who symbolize the United Nations and the United Nations' determination to preserve freedom, security and peace. We join with all others in expressing our appreciation of what these men and those whom they represent have done on our behalf. I think when the fighting is all over we in Canada will join with other nations not only in establishing a firm basis of peace but in endeavouring to rehabilitate the great devastation that has been wrought by our United Nations effort to preserve the freedom of the world.


Mr. Solon E. Low (Peace River):: Mr. Speaker, we should like to be associated with all that has been said about this very interesting and historic occasion. Without multiplying words, we feel we are most honoured to be in the presence of such gallant men today.


Mr. J. H. Ferguson (Simcoe North):: Mr. Speaker, may I ask if we could be assured that an appropriate photograph will be taken of the heroes who are visiting us today in

Inquiries of the Ministry the House of Commons, so that each man who forms an integral part of this gallant group visiting us will appear distinctly in the photograph. I would ask that it be made available across Canada, and that the decorations appear clearly in the photograph so as to signify to all people in Canada that these heroes have fought for what Canada and the United Nations stand for. I trust that an opportunity will be given to every Canadian to have this photograph to cherish.
(Translation):



PUBLIC WORKS


[Stage Direction]
On the orders of the day:
Mr. Leon Balcer (Three Rivers):: Mr. Speaker, before the orders of the day are called, I wish to direct a question to the Minister of Public Works. Is it the intention of his department to repair or rebuild the Ste. Angele wharf, opposite Three Rivers, next spring?


Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, in reply to the hon. member for Three Rivers, I may say that I have received repeated representations from Mr. Mongrain, mayor of Three Rivers, and from the hon. member for Nicolet-Yamaska (Mr. Boisvert) in connection with repairs to this wharf. Should the facts they stated be confirmed by the officials of my department and providing I have the support of my colleagues of the cabinet, I would not be surprised if these repairs were made some time next year.
(Text) :



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: I had
intended to ask a question of the Minister of Veterans Affairs. I do not see him in his place but perhaps his parliamentary assistant can deal with it. It arises out of a statement which the minister is said to have issued yesterday concerning the relationship between payments under the War Veterans Allowance Act and the new old age security measure. Can the parliamentary assistant tell us if a new statement has been issued by the minister, and if any government policy has been announced in this regard apart from what was said in the house when the resolution was under debate last Thursday, October 25?


Mr. L. A. Mutch (Parliamentary Assistant to the Minister of Veterans Affairs):: I can
only say that I know of no new pronouncement. The minister was not here in the latter part of the afternoon yesterday, and I am not aware of any change since. I will inquire and if there is I will tell my hon. friend.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. W. J. Browne (St. John's West):: In the
absence of the Minister of Finance I should like to direct a question to the parliamentary assistant. It concerns the statement made by the premier of Newfoundland that he has $20 million on deposit in Ottawa. In view of the fact that he has made that statement, I wonder if the Minister of Finance would be in a position to confirm or deny it.


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: An adequate answer was given to that question yesterday.


William Joseph Browne: The answer yesterday was that the government of Canada-


Some hon. Members:: Order.


William Joseph Browne: -regarded itself in the position of a banker, but in view of the fact that the premier has made the statement himself in Newfoundland would the Minister of Finance confirm or deny the figure that he gave?


James Sinclair: The hon. member should
obviously direct his question to the provincial government who are the possessors of that fund. The Minister of Finance gave a complete and adequate answer to the question yesterday.



ARMED FORCES DEPENDENTS


[Stage Direction]
On the orders of the day:
Mr. F. D. Shaw (Red Deer):: I should like to address a question to the parliamentary assistant to the Minister of Veterans Affairs. Notice was sent to the minister's office yesterday. Has the government given consideration to the setting up of a dependents allowance board or some similar board through which special financial assistance can be granted to the dependents of Canadian servicemen to enable them to meet medical and hospital expenses?


Leslie Alexander Mutch: I will take the hon. member's question as notice. I have not had any communication from the minister, and I am not in a position to answer the question at the present time.


Frederick Davis Shaw: Might I ask the parliamentary assistant to bring the matter to the attention of the minister? I sent notice yesterday.


Leslie Alexander Mutch: Yes.



INTERNATIONAL WHEAT AGREEMENT


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to address a question to the Minister of Trade and Commerce arising out of the meeting of the international wheat agreement council. Has the council, as the result of its deliberations during the last few days, accepted the six cent handling charge which was imposed by the minister some weeks ago?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: The six cent handling charge has been applied to all wheat sold under the international wheat agreement from the beginning of the present crop year. The matter of the six cent handling charge was referred from the last meeting of the council to the meeting going on at Lisbon at the present time. I believe the meeting opened yesterday. I have heard nothing from Lisbon about that or any other matter before the council. I am very doubtful whether the question of the six cent handling charge will be brought up, but if it should be, I shall be glad to announce in the house any decision that is arrived at.


John George Diefenbaker: Did the importing countries not appeal against the handling charge and was it not to come up before the meeting at Lisbon?


Clarence Decatur Howe: An appeal was entered. Whether it will be followed up I do not know. As I have said, the importing countries have been paying for their wheat with the handling charge added, and I rather think they are satisfied with the present arrangement.



COMBINES LEGISLATION


[Stage Direction]
On the orders of the day:
Major James William Coldwell: should like to direct a question to the Minister of Justice. Does the resolution contained in
Inquiries of the Ministry Votes and Proceedings for October 31 asking the house to approve the appointment of a committee to consider the interim report on the combines legislation supersede the intimation in the speech from the throne that we are to consider legislation arising out of the committee's report? There seems to be a conflict.


Hon. Stuart S. Garson (Minister of Justice):: In reply to my hon. friend's question, I may say it does not supersede it; it complements it.


Major James William Coldwell: If the committee's work is to be complementary to the legislation, do I understand that the legislation is to be introduced this session for the study of the committee?


Stuart Sinclair Garson: If I were to answer my hon. friend's question in the affirmative I might perhaps be arrogating to myself some measure of control over a committee that will govern its own proceedings.


Some hon. Members:: No.


Major James William Coldwell: Will the legislation be introduced for study of the house?


Mr. Knowles:: As intimated in the speech from the throne.


Stuart Sinclair Garson: In reply to my hon. friend's last question, may I say that I would hope that the committee in the early stage of its proceedings would receive from the Department of Justice a draft copy of the bill for consideration along with the report.


Major James William Coldwell: Should the house not receive that as a bill?


Stanley Howard Knowles: And within fifteen days, too.


Stuart Sinclair Garson: My information is that the rules of the house prohibit the introduction of a bill based upon any resolution such as that now under discussion. In order to comply with the rules it has been thought preferable that we should move the resolution in the form in which it now is, and that, at an early stage in committee proceedings, draft legislation might be introduced for discussion. Then, so far as the house is concerned, the legislation would come back from committee and the fullest possible opportunity would be given to the house to consider the terms of the bill.


Major James William Coldwell: May I ask another question? Is this not a change fjom the procedure foreshadowed in the speech from the throne?


Stuart Sinclair Garson: I am afraid that to answer that question would exceed what is properly permissible before the orders of the day are called. But, for reasons which I will explain in greater detail tomorrow, when I move the

Inquiries oj the Ministry resolution, this resolution I think can be correctly stated as being complementary, under the circumstances.


George Alexander Drew: Mr. Speaker, since this subject has been raised, and since there has been an exchange of views with respect to it, may I point out that, far from the procedure suggested being contrary to ordinary practice, the procedure suggested would be entirely in keeping with it. Because when we are asked to move, or when we are asked -to deal with, a resolution of this kind we should know exactly why it is necessary that such a resolution be passed. And we must expect that, when the government in the speech from the throne indicates that it attaches considerable importance to a measure of this kind, it did have within its own knowledge what kind of measure it proposed to Introduce. This being so, that measure should be before the house when the resolution is under consideration.


Major James William Coldwell: That is right.


Stuart Sinclair Garson: In fairness to our own position with respect to the statement just made by the leader of the opposition, that I should consider the resolution with draft bill included, to which the leader of the C.C.F. party (Mr. Coldwell) has just referred, I would say that we considered the very course which has been touched upon by him and by the leader of the opposition. In other words we were quite prepared to have a draft bill and append that to this resolution which went before the committee. We consulted the law officers of the crown, and officers who have to do with procedure of the house; and we were advised that, notwithstanding the observations which have just been made by the leader of the opposition, there was no precedent for such a course; and we rather shied away from making a precedent on this occasion.
Whether we followed that course or the course which we are proposing to follow, I do not think that in the long run it will in any way prohibit discussion, or that in any way it will curtail consideration that the committee and this house will eventually be able to give the matter.


George Alexander Drew: As a matter of information, would the Minister of Justice explain the difference between presenting a bill recommending an amendment of this kind, and then referring it to a committee, and presenting a bill covering amendments to the Railway Act and then presenting it to a committee? What is the difference in the two cases?


Stuart Sinclair Garson: I am speaking only from casual recollection of what originally took

place in connection with the railway bill, but I think my hon. friend will agree with me that on that original occasion a bill was to be introduced, and then there was to be a motion that the bill be not read a second time, but that the subject matter of the bill should be referred to the committee on railways, canals and telegraph lines.


Donald Methuen Fleming: It was read a second time.


Stuart Sinclair Garson: But in the present instance we are faced with this position, that it has been represented to us-and we think very reasonably and fairly-that an opportunity should be given to those who are in favour of passage of the legislation in question, and those who are opposed to it, to present their views to a committee of parliament upon the subject matter.
What I am saying is this-and I hope the leader of the opposition will take note of it- that if such an opportunity is -to be given, the advice we have received, after going carefully into the matter, is that the preferable manner in which to do it is to present the resolution in the form in which we have presented it; and then, when the resolution is before the committee, to bring draft legislation in, if the committee is prepared to receive it, at an early stage in its deliberations.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Jean Lesage (Parliamentary Assistant to the Secretary of State for External Affairs):: Mr. Speaker, on October 24 the hon. member for Peel (Mr. Graydon) asked the Secretary of State for External Affairs (Mr. Pearson) if he would consider making available and distributing to members of the House of Commons a verbatim report of the speeches made in the plenary sessions of the United Nations meeting at Paris.
The Secretary of State for External Affairs answered that he would look into the matter. He did so before leaving, and has asked me to tell the hon. member for Peel about the difficulties, especially that of the high cost involved in such a distribution of the records. However, instructions have been given to our people in Paris to send us each day, by airmail, additional copies of the records of the plenary sessions of the United Nations. And, if it meets with the wishes of the hon. member, those additional copies can be placed at the disposal of the members of both houses of parliament in the reading room.


Mr. Gordon Graydon (Peel):: I discussed
yesterday with the parliamentary assistant the

proposal he has just made today. I fancy that it will meet the requirements some hon. members had in mind when I raised the question. I believe the expense, to which reference has been made, would have been connected with a wider distribution than I had originally intended. It was only the first few speeches in the plenary sessions that I had in mind when I raised the question. I was not thinking about the voluminous report of the United Nations itself. So far as I am concerned, I shall be glad to accept the explanation given by the parliamentary assistant with respect to what the government proposes to do.



NORTH ATLANTIC TREATY ORGANIZATION


[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, I should like to ask a further question of the parliamentary assistant to the Secretary of State for External Affairs, Is it the government's intention, when it proceeds with the legislation envisaged in item No. 7 on the order paper, the measure to approve the agreement on the status of the North Atlantic Treaty Organization, at the appropriate stage of proceedings to send it to the committee on external affairs for study and report?


Jean Lesage: am not a member of the government, and would not be in a position to answer that question. That would have to be answered by a member of the government.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: May I ask the Minister of Transport if he is now in a position to answer my question of last Thursday, as to whether or not rule 9 of the Canadian National Railways pension fund will result in Canadian National pensioners who are 70 years of age or over losing any of their pension rights or benefits when they begin drawing the new universal old age pension.


Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, I inquired from officers of the Canadian National Railways as to the position in relation to rule No. 9, and I find that no pension granted under the pension
Old Age Security
fund rules of the Canadian National Railways will be affected in any way by the position placed upon Hansard on Thursday of last week by my hon. friend. In other words, no pension will be reduced or withdrawn or withheld because of the receipt by the pensioner of the old age security benefit of $40 or more.
I am further informed by the officers of the Canadian National Railways that rule No. 9 has never been invoked in that sense, neither is it the intention to place that interpretation upon it.


Major James William Coldwell: These gratuities granted for retirement on account of ill health, but not under the superannuation fund, will be continued also?


Lionel Chevrier: I expected that question would be asked by my hon. friend. While it is true the gratuity is in a somewhat different position than the matter covered by the question by the member for Winnipeg North Centre (Mr. Knowles), I asked the officers of the Canadian National Railways to give attention to that point. I have not had a reply from them as yet, but when I do I shall bring it to the attention of the house.



OLD AGE SECURITY TO PROVIDE FOR PENSIONS, WITHOUT MEANS TEST, AT AGE 70

Hon. Paul Marlin (Minister of National Health and Welfare) moved: the second reading of Bill No. 13, to provide for old age security.


Donald Methuen Fleming: I am
sure, Mr. Speaker, it will be quite obvious, from the remarks that were made in the resolution stage of this matter on October 25, that the house will be glad to give unanimous endorsation to the principle of this bill. This measure represents an achievement in which all parties in the house have shared honourably. Indeed, it could be called the fruit of a coalition of aim and effort on the part of all parties in this house, an effort in which parties have risen above partisan considerations to bring about the fulfilment of a great national purpose.
I am equally sure that no further comment is required on the features of the pension payable under this legislation, after the full discussion that was held on the resolution on October 25. There are, however, two subjects which came to the fore during that debate which will have to engage the attention of the government and the house further. The first, Mr. Speaker, is in regard to the matter of proof of age. I know the house was glad to hear from the Minister of National Health and Welfare (Mr. Martin) that a substantial

Old Age Security
number of applications are being processed week by week. We do repeat the warning imparted last week against too strict an enforcement of exacting standards of proof. We are glad to see that the bill itself contains a provision enabling the minister to have access to the files of the dominion bureau of statistics in the case of census records taken more than 30 years ago. We ask the minister not to wait until the first of January next to make use of that provision, but to put it into effect at once in order to give every reasonable assistance to those to whom adequate records of birth are not available.
The second point relates principally to the effect of this legislation on veterans allowances. I urge again that the effect of this measure on the benefits payable under the War Veterans Allowance Act should have the early consideration of a parliamentary committee. That matter should not be suspended until the 1952 session of this house, because it is of urgent importance to many veterans. I believe that if every individual member in this house were asked directly if he wished the enactment of this measure to deprive any veteran of any benefit he now receives under any other legislation, the answer would be an emphatic no. It is quite obvious that this measure as such does not purport to affect the rights of veterans under other legislation. Our concern is as to the effect of other legislation in the light of the enactment of this measure.
We had the assurance of the Minister of National Health and Welfare last Thursday that the veteran in receipt of an allowance or pension will be in the same position under this measure as any other person of age 70. But that is not the point. It is the converse proposition that is left in doubt. Today's press carries reports of a statement issued yesterday by the Minister of Veterans Affairs (Mr. Lapointe). It was that report which prompted the question I asked a few minutes ago on the orders of the day. It now appears that no further statement has been issued by the minister. There is nothing that the government has to add, by way of an announcement on policy, to what was said in this house on October 25. I conclude what I have to say on this subject, Mr. Speaker, with this observation. What the house heard on that occasion is not satisfactory. The house will, in justice to those who are now in receipt of benefits under the War Veterans Allowance Act, wish to be assured by solemn legislative provision that the payment of pensions under the old age security act to veterans 70 years of age and over will take nothing whatever from the benefits that the veterans are receiving under other legislation.

When the resolution was under discussion a week ago, I reserved any comments I might wish to make with regard to the financial aspects of the measure. It was not appropriate that, following the speech made by the Minister of Finance (Mr. Abbott) on that occasion, one should have been expected to make any detailed comment upon what were, after all, the equivalent of budgetary proposals. There would be more freedom on this occasion if the procedure suggested by the member for Lake Centre (Mr. Diefenbaker) had been followed, namely, that the Minister of Finance introduce resolutions which, in turn, would have been referred to the committee of ways and means. We might then have had a bill to amend the Excise Act, and a bill to amend the Income Tax Act. In the rather confining way in which the matter of the financing of the old age pension now comes before the house I should like to offer some brief comments.
First of all, the cost estimated under a full year is $343 million. This figure is slightly in excess of the estimate made by the committee on old age security in 1950. We shall not find it hard to believe the Minister of Finance when he said that in devising proposals for meeting the cost he found it "no easy problem."
I remind you, sir, that the committee on old age security did not make any recommendations concerning the methods by which the cost of the pension should be met. On the contrary the committee, and I think very wisely, reserved itself on that subject. Paragraph 67 of the recommendations of the committee reads as follows:
The committee, however, did not consider that it was part of its responsibility to do more than indicate possible forms of contribution. The raising of revenues is a technical problem which bears a close relation to fiscal policy in general, and the committee did not feel that it should suggest more than the main outlines and principles to be followed.
In referring to paragraph 66 of the recommendations of the committee in which an example was given by the committee as to possible ways of financing the cost of this measure, hon. members should read that paragraph in the light of paragraph 67 which I have just mentioned. When the Prime Minister (Mr. St. Laurent) made his announcement in the house on June 4, as reported at page 3665 of Hansard, I think he recognized that the committee had taken a wise course in refraining from making any recommendation as to the way in which the cost of the pensions should be met.
The scheme of pensions which has been selected, in keeping with the recommendation of the committee, is a universal pension. This

selection in itself precludes the levying of individual contributions with separate accounts to be kept for each contributor, on the insurance principle. Because the benefits are to be equal, it precludes any complete recognition of any suggestion of equalizing or of directly relating to each other contributions and benefits. It is not strictly proper to call this a contributory scheme; certainly not in the orthodox sense of the word. The nearest approach that can be made to the preservation of the contributory feature in the universal scheme is to earmark taxes, or contributions in the form of taxes, to a special fund. The committee, in paragraph 64, sought to preserve, as far as is possible in a scheme of this kind, the contributory principle. Paragraph 64 of the recommendations of the committee reads as follows:
The committee is In favour of the contributory principle, not only because of the importance of this in raising total moneys required, but also because of the importance of establishing a close association in the mind of the individual between his contribution to the cost and the ultimate benefit he is to receive.
In the light of these principles and in the light of the nature of the pension scheme I suppose it is fair to say that there are two purposes or overriding considerations which should guide the house in its review of the proposals as to financing the cost of the measure. In the first place, we want to see the cost distributed equitably. In the second place, I think that the house will desire to preserve-as the committee recommended in paragraph 64 which I have just read-the consciousness on the part of the individual of the association between the contribution he is making to the cost and the benefit he is to receive. It is on that basis that rest our ideas, our beliefs in the house, that we are departing as far as we can from the idea of any handout, any payment as of grace, and are seeking to supplant that type of payment with a payment which will be received by the pensioner as of right.
In examining the 2-2-2 formula proposed by the minister, one notices at once, of course, that he has recommended that the entire cost of the $40 a month pension for those 70 years of age and over is to be borne out of the special fund to be created by earmarking taxes. In the example given by the committee in paragraph 66 of its report there was a suggestion that a sum equivalent to the amount now payable out of the consolidated revenue fund-which is, in round figures, $100 million a year- might continue to come out of the consofi-dated revenue fund as such. I think the house will be glad to see that the minister, in his proposals, has recommended that the 94699-39
Old Age Security
entire cost, without deduction of that $100 milhon, is to come out of the special old age security fund.
The minister proposes that this coming year there should be collected, under his 2-2-2 formula, a total of $305 miRion: $145 miRion by the 2 per cent sales tax; $95 million by an additional 2 per cent tax on personal income; and $65 miRion by an additional 2 per cent tax on corporation income. So far as the last of the three taxes is concerned, I suppose that in the case of corporations which are enjoying the benefit of a sellers' market, it will be possible for them to pass on that cost to consumers. In other circumstances that tax will be borne by the shareholders.
In the case of the income tax, we have noted the statement made by the Minister of Finance (Mr. Abbott) that the income tax is paid today by about one-half of the working population. There is no suggestion in this house, I am sure, in the tight of the high cost of living prevailing today, of lowering exemptions to cover any extended contribution by way of income tax.
In coming to the sales tax, one observes that the minister contemplates that, out of a total of $305 miRion to be collected next year, $145 miRion shall be payable by way of the 2 per cent sales tax. In that way the Minister of Finance is proposing to collect 47.5 per cent of the total amount out of the sales tax. If inflation continues, that amount could well increase to one-half of the total amount. It would be well for the house to have that fact in mind, therefore, namely that the minister is looking to the sales tax to meet about one-half of the cost of financing the old age security measure.
His estimate of the revenue to be derived from a 2 per cent addition to the sales tax has increased substantially from the estimate which he gave to the house last spring in his budget speech. At that time he estimated that the 2 per cent addition to the sales tax would yield to the treasury $125 miRion in a full year. His estimate of the yield from the same percentage of taxes has now been increased to $145 miRion. We recognize, of course, that the minister, in suggesting a 2 per cent sales tax, is in effect transferring 2 per cent out of the present 10 per cent sales tax to the new old age security special fund. Certainly it is a matter of relief, I am sure, to members of the house that the minister has not proposed any addition to the present total of the sales tax.
We must not underestimate the difficulties faced by the Minister of Finance in meeting

Old Age Security
this cost, and we must recognize that the cost of the old age security measure must be paid, that these measures cost money and there is only one source from which the revenue can came, namely the pockets of the taxpayers. Recognizing all that, one must indicate again, as one did last spring, that the sales tax is a hidden tax. The consumer does not realize what proportion of the price of the goods he buys goes to meet the sales tax; and in that respect the sales tax does not create any consciousness on the part of the buyer in a direct sense, that kind of consciousness that the committee referred to in paragraph 64 of its report.
We must recognize as well that it is a costly tax to the consumer because it pyramids as the result of mark-ups as the goods pass from hand to hand, from manufacturer or producer, who pays the tax in the first instance, to the wholesaler, from the wholesaler to the retailer, from the retailer to the consumer, and that a 2 per cent sales tax in this way levied on the manufacturer or producer will probably cost the consumer not 2 per cent but closer to 4 per cent on the. cost of the goods that he has to buy.
We have noted what the Minister of Finance (Mr. Abbott) had to say in arguing as he did that this tax works out proportionately on all sections of the population. I am not going to enter into that discussion today. I have noted, however, the argument that the Minister of Finance did put forward in commending his proposals in this regard to the house.
I think all hon. members would have hoped that if a consumption tax were to be selected by the minister as one of the sources of revenue designed to help meet the cost of this pension, the minister might have devised some kind of consumption tax that might not have had these features about it which hon. members will recognize, I think, as disadvantages in the sales tax. For instance, it might have been possible for him to work out a proposal that would make the amount of the tax payable by the consumer known to him, and might have been cheaper in collection by being levied at the end of the chain of sales rather -than at the beginning. However, Mr. Speaker, I am sure we are all aware of the fact that the experience of the federal government has been difficult in the field of the collection of a retail tax. There was some slight experience with that during the war.
Hon. members I know are aware of the fact that machinery does not exist at the moment for the collection of a federal retail tax, and machinery, as the Minister of Finance has told us, is available for the collection of the sales tax. The proposals

he has made will not involve any addition to or interference with the present scheme of the collection of taxes.
One will also have to bear in mind, in commenting on these matters, that there are several provinces which themselves are -collecting a retail sales tax. No doubt that also entered into the conclusions the minister embodied in the -proposals he supported in the house.
Sir, there is one further matter that I think deserves comment at this moment. In his statement last Thursday the Minister of Finance indicated that, having regard to the figures of cost he submitted to the house and the figures of anticipated revenue from the application of the 2-2-2 formula, he anticipates a deficit in the old age security fund of $50 million during the first year of operation.


Mr. Fraser:: Calendar year.


Donald Methuen Fleming: The first calendar year. In
the case of the fund that would be the year 1952. I consider that the government ought to be more specific in the information given to the house with regard to this estimated deficit. We are subscribing as a house, I take it, to the principle of a pay-as-you-go measure, a pay-as-you-go universal scheme, and we do not wish to see the fund hamstrung the first year of operation, if we can avoid it, by any $50 million deficit, which presumably will have to be made up as time goes on by levying more than is actually required to meet the cost of the current pensions.
Finally, sir, let us be realistic, let us be fair. In this measure we are committing Canada not just for one year, but I am sure permanently, to an additional tax burden. In place of a burden on the federal treasury that will this year amount to approximately $106 million, we are proposing that that load on the treasury be increased next year to $343 million; and we know in doing so that, with the increasing number of Canadian citizens 70 years of age and over, that amount is bound to increase year by year. There may be some who in the face of this step in creating a permanent increase in the national overhead cost of government will have misgivings. Sir, it may be that those who entertain those misgivings-and I am not one of them-will do so without adequate realization of the benefits that are going to flow directly from this measure. But to the attention of such, one would like to draw two factors which, it seems to me, are a necessary, effective and complete answer to those who might otherwise entertain concern about the permanent increase in the national overhead

cost of government. The first is this: with the development of Canada's resources, her great and almost unlimited resources, by the application of the energies of a vigorous and intelligent people we may look with confidence to a future in which an expanding national production, and an expanding national income will be able to absorb this measure of increase in the cost of government.
In the second place, sir, let us not overlook the fact that the abolition of the means test and the provision of this universal pension are going to make it more attractive for people of advancing years to apply their physical and mental energies to swell the productive effort and capacity of this country.
There are several paragraphs in the committee's recommendations in this regard which I think are deserving of special mention. On page 101 of the committee's report there are three paragraphs under the general topic "Later years of retirement." These follow paragraphs in which attention is honestly drawn to the fact that the numbers and proportion of our population in the age group 70 years of age and over are going to increase. The committee said in clauses 3 and 4 of its recommendations:
3.	The committee has also in its deliberations been faced with the fact that regardless of the age which may be selected as normal for retirement, the magnitude of the problem and the numbers of persons in the population above the selected age do not remain static. Due to improved health services and the consequent increase in the longevity of our population, along with other factors, our aged population is growing from year to year.
4.	In 1931 the average life expectancy for newborn males was 60 years and for females 62 T years. The total population of Canada over the age of 65 was 576,000, representing one in every eighteen of the total population. Since then the average life expectancy of new-born males and females has risen to 65-18 years and 69-05 years respectively (1947 figures). Combined with increased longevity was a decline in the birth rate, since reversed, which has contributed to a higher proportion of population in the advanced age brackets. The total of persons 65 or over in 1951 will number approximately 1,101,400 or one in every thirteen of our population. This trend towards an ageing population may reasonably be expected to continue through the decades ahead. It is estimated that in 1961 the population 65 and over will approximate 1,372,500, and in 1971 it will rise to 1,630,000.
Then the committee went on to say:
6.	As large numbers of persons reach what may, under present circumstances, be considered the normal ages of retirement, and as they find themselves in better health, it may be expected that they will show increasing reluctance to accept the inevitability of retirement at such ages. It is in the interests of the individuals themselves and of the country as a whole that we should rethink our attitude towards continued gainful occupation of these older age groups.
7.	The committee believes that increasing emphasis should be placed on efforts to remove from people's minds the idea that there is any set or
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accepted age for retirement. Each individual in the nation's population should be encouraged to continue as long as possible in gainful employment.
8.	Not only is this a matter of importance to individuals themselves in terms of their health and mental outlook, but it is of even greater importance to the over-all economy of the country. Surely a country like Canada, with a wealth of natural resources still in large part undeveloped, is justified in having profound faith in its economic future. If we are to develop these resources adequately, we shall need to retain in active undertakings the largest possible number of our nation's population. The committee believes that, in the years ahead, our economic progress and prosperity will depend in significant measure on the success of efforts made to utilize to the fullest possible advantage the mature skills of these older workers.
That last fact was emphasized in some excellent presentations made to the committee by various groups, including employer groups, who stressed the value to industry of older men whose skills are great and who under the current pattern of industrial pensions are being retired. It will now become possible, without depriving any of these workers of their rights under industrial pensions, for them to enjoy the benefits provided by this present measure. That will be a great step forward and the therapeutic effects of encouraging people in advancing years to feel that they are useful to society, that they still have a place of usefulness in the Canadian economy, will be of benefit to our ageing population far beyond the capacity of any of us in this house to measure adequately, let alone to exaggerate.
Especially at a time like this every effort should be bent to increasing the total productive capacity of the country. The means test did a great deal to discourage people seventy years of age and over from continuing to contribute their skills to the national productive capacity, and the abolition of that means test is a great step forward and one that I am sure will be hailed by all members of the house in acclaiming this new type of pension on a universal basis.
We can help to counteract the ageing trend of our population by encouraging the expansion of our population of working age through immigration. We can help to contribute to the capacity of the country to carry the financial weight of measures of this kind by pursuing, in this house and throughout the country, policies which will contribute most effectively to the development of the great natural resources of this country by an aggressive, intelligent and industrious Canadian people.


Stanley Howard Knowles: Mr. Speaker, when the resolution, preceding this bill was introduced on Thursday of last week we were given an explanation of what was to be in the bill, an explanation which was in two parts. On the

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one hand, the Minister of National Health and Welfare (Mr. Martin) made it clear that with regard to the benefits of the new old age security legislation the intention was to carry out the recommendations of last year's committee on old age security. On the other hand, the Minister of Finance (Mr. Abbott) gave us the government's proposals with respect to the financing of this plan. As has already been pointed out, that side of the program represented a decision taken by the government itself.
As I have reviewed the debate that took place last Thursday I have realized that the points at issue in connection with this matter have been pretty thoroughly discussed. My own feeling, after having given the matter a further week's thought, is that the two main objections which I registered a week ago should be drawn once again to the attention of the house and the government. Like the hon. member who preceded me, and I am sure all hon. members, I welcome with the greatest pleasure and enthusiasm this important measure. It represents a step that some of us have long wanted to see taken, in that it removes the means test from the old age pension, at least for those 70 years of age and over.
Nevertheless I feel that our responsibility to the people of Canada is such that we cannot content ourselves with boasting of what we are doing. Rather we should examine the legislation before us and point out any weaknesses or flaws that we may see, in the hope that they may be corrected as this bill goes through the house or, failing that, that they may be corrected by amendments to the legislation at the earliest possible opportunity.
As I indicated a week ago today, the flaw which stands out most prominently in this bill is the fact that the government has failed to increase the amount of the pension beyond the $40 figure which has been the amount of the means test pension since 1949 and which the minister pointed out was included in the report of the committee. All of us are fully aware of what has happened to the cost of living since the committee made its report in June, 1950. That increase makes absolutely imperative an increase at this time in the amount of the pension.
As I pointed out at the previous stage, $40 today in terms of the value of the dollar in 1949 when the pension was first brought up to $40 is now only $33 in relation to the general .cost of living index, and only $31.62 in relation to the food index. Similarly, when one looks at the value of the dollar on the 1935-39 basis, $40 today is worth only $21.07 on the general index, and only $15.92 in relation to food. I single food out for

the obvious reason that that is the expenditure which our old people have to deal with in the first instance, and it forms a very large part of their cost of living.
I want to say that I feel there are two things that are tragic about this $40 figure. On the one hand I think it is most unfortunate that that is all that is being provided at the present time when certainly for great numbers of our older people a larger sum is needed. I think in particular of the more than 200,000 old age pensioners who are already drawing the full $40 under the previous legislation, the old age pension with a means test. For them there is no improvement in their position whatsoever as the result of this legislation as it stands. Their need for some improvement is demonstrated by the fact that they have already met the existing means test. In other words, such other income as any of them might have is so little-and in most cases it is none at all -that they are clearly in need of more than this amount in order to keep going at all. I feel that we should consider the plight of that group of people, and that something should be done for them now.
It is no solution to their problem, no solution to the old age pension problem as a whole and the whole question of social security, for anyone to suggest going back to the means test principle even for a supplement for these people. To submit them to another means test would be unthinkable. As I see it, the only answer to their problem is an increase in the amount of the pension and a proper taxation system to see to it that any such increase that accrues to millionaires who do not need it comes back into the general revenues of the country. On that basis I urge most strongly that this house press upon the government during the course of this debate, and particularly when we get into committee of the whole on the bill, that consideration be given to increasing the $40 figure provided in the legislation.
As I said the other day, if one looks merely at the rise in the cost of living that has taken place since 1949 the amount of the pension should be very close to $50 a month. Even that in my view would not be enough. I am thinking not in terms of the distant future; I am thinking in terms of ordinary decency, justice and fair play today; and on that basis I feel the amount ought to be $60. I insist that the house should bring this fact very forcibly to the attention of the government during the course of the debate.
As I see it, the other tragedy about the $40 figure in the bill is that the government has already set up its defences against any campaign for an increase in the amount at a

later stage. We have, for example, the statement made by the Prime Minister (Mr. St. Laurent) on February 20, 1950, even before last year's committee was set up, to the effect that he hoped that any old age pension plan would be on the kind of contributory basis that would make it clear that if any section of the community wanted an increase in the pension there would have to be a corresponding increase in the taxes collected directly for that pension. Now we have the Minister of Finance (Mr. Abbott) not only setting up a special fund but writing into the legislation the necessity of the Minister of Finance reporting to the house each year on the state of the fund, drawing attention to any deficit that may obtain and making recommendations to the house as to what additional taxes should be imposed in order to meet the deficit. In other words, in the language of the Canadian Tax Foundation, which has already been sending out some literature on the new old age pension plan, the Minister of Finance is setting up defences, setting up ways and means of blocking what these tax foundation people call extravagant demands for increases.
Not only have we defences set up in the legislation itself but we have statements such as the one that was made yesterday by the hon. member for Vancouver South (Mr. Laing) who said he deplored the evidence of the fact that pleas would be made in various parts of the house, and perhaps throughout the country at the next election, for an increase in the amount of the pension. He even went so far as to say that if different parties were bidding higher amounts for the pension that would be bad for the people of Canada. I do not agree. It seems to me that what is really bad for the people of Canada is to suggest that the $40 figure is in any way frozen, in any way a figure that must last for all time. Surely members of the house will recognize that we do not live in a static world or a static economy. Things move on, things progress, and as we increase our productive capacity, as we increase the standard of living that is made possible by steadily improving technological developments, surely we ought to give a proper portion of that improvement to those who have contributed to this possibility during the years prior to the age of retirement.
In my view it is an integral part of the whole idea of old age security, and it is particularly germane to the universal pay-as-you-go concept which the committee has brought back to the house, that social security is not something static, but rather that it moves on, that there are increases that must
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be made in old age security commensurate with the changes and the improvements that are made in our economy as a whole. Therefore I say to the hon. member for Vancouver South, and to others who suggest that we should be satisfied with this $40 figure, that we are not satisfied, and appeals will be made by us to parliament, to the government and to the country for an increase in the amount of the pension.
As I have already said, I think that such an increase should be made before the bill finally passes parliament at this time. If the government does not see fit to agree to that request we will certainly continue fighting for it as time goes on. Some members of last year's committee may say that we should have argued this way with respect to this phase of the matter when the committee was meeting last year. They will remember that in the committee we were not satisfied with the $40 figure but we were prepared to accept it at that time because of the great importance that we attached to getting rid of the means test and to getting a pension started at an earlier age, namely, the age of 65. But since June, 1950, there has been a staggering increase in the cost of living which alters the whole picture. I say that to carry out the intent, spirit and heart of the recommendation made by the committee for a universal plan on a pay-as-you-go basis, a plan which takes a portion of the wealth that is produced currently and gives it to old age security, there should be an increase in the amount of the pension right now.
Not only have we defences set against any demand for an increase as I have already indicated, the statement made by the Prime Minister, the statement made yesterday by the hon. member for Vancouver South and statements by others, but even in the very good suggestion that something is to be done to amend the annuities act so as to integrate government annuities with old age pensions I see an attempt to set up a barrier against any move to try to get the amount of the old age pension increased. That is an admission that the $40 provided by this legislation is not sufficient. But it also is a suggestion to the Canadian people that one way to obtain an increase in the amount they are to enjoy is to purchase government annuities. I welcome changes in the Government Annuities Act which have been forecast, but I suggest that they do not deal sufficiently with this problem of old age security, in terms of the needs of our people as a whole.
That sort of solution will help only a limited few. The heart of our committee's report was that we wanted to have established a plan that would meet to some extent-to a
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and gets what he pays for. The rich do not pay for more than they get back; the poor pay for all they will get. That is the benefit idea.
The Minister of National Health and Welfare pointed out at page 383 of Hansard that any program based upon the insurance or benefit principle has some very definite shortcomings. He concluded that part of his remarks by saying this:
Let me repeat. Where such a system operates, two programs exist indefinitely side by side:
(a)	a system of insurance benefits, paid as of right only, to those who have made the required contributions; and
(b)	a system of old age assistance, based on a "means test" for those who cannot so qualify.
What the Minister of National Health and Welfare was telling us there was something we learned in last year's committee, namely that if any country tries to base its old age security merely on the benefit or insurance principle, it is impossible to provide enough old age security for the great masses of the people and to avoid the necessity of supplementing it with a means test program. Our committee said, "We do not want that". I believe the government does not want it, and I am sure the people of Canada do not want it. I agree wholeheartedly with the emphasis used by the Minister of National Health and Welfare in that connection. I could quote other places where he made similar remarks to spell out the same idea, and they are taken clearly and faithfully from the ideas of last year's committee.
On the other hand I find the Minister of Finance rises in the debate immediately after the Minister of National Health and Welfare and tells us this, as it is recorded at page 388 of Hansard:
, Taxation for social security finds justification in the benefit principle of taxation. All pensioners, rich and poor, receive equal benefits. From this it could quite reasonably be argued that all should make equal contribution towards the fund . . .
Let me say I am cutting off in the middle of a sentence, the rest of which is to the effect thait if we did go to that extreme it would seem harsh and impracticable. My point is that the Minister of Finance, despite the views of the committee and despite the statement of the Minister of National Health and Welfare, says that so far as he is concerned he thinks there is an argument to be made for the benefit principle by requiring that, since everyone is getting the same pension at 70, he should make the same contribution across the years. On page 415 of Hansard the Minister of Finance expressed the same idea when he said:
It should be based on the benefit principle of taxation and in strict logic everyone should make the same contribution.
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You see, these ideas keep coming out from the Minister of Finance. They reveal the way he thinks about these things. On that same page he said:
But on the principle that it is fair and just that everyone should get equal payment then contributions should be made on the benefit principle.
The committee rejected the benefit principle, and so did the Minister of National Health and Welfare. The Minister of National Health and Welfare stated, as did the committee, that if you go in for the insurance or benefit principle the day will be reached when you will have to supplement that scheme with a means test program.
May I interject for a moment to give you my own analysis of why the day comes when you have to bring in a means test program to supplement the universal plan if it is on the benefit or insurance principle. The fact is that if you require that the rich shall not pay for more than they are going to get and therefore make the poor pay for all that they are going to get, you have to keep the amount of the pension low enough to keep it within the means of the poor. The result is that it is only a matter of time until that pension is inadequate for everybody, except those who have private means. It is because that situation develops that it is necessary to bring in a means test program to supplement any scheme based on the insurance or benefit principle.
I have a great deal of pride, Mr. Speaker, in last year's committee's report. I believe it is one of the finest documents in the social field that was ever presented to this parliament. I have a particularly keen interest in it, and I want to see the principles enunciated therein carried through. I listened with interest to the speech made last week by the Minister of National Health and Welfare. Apart from the little boasting he threw in, which we all recognize he likes to do, he was right on the beam in enunciating those principles. Then the Minister of Finance comes along and reveals that he would like to keep this as a benefit plan. He would like to keep it on the insurance principle. The plain fact of the matter is that he has pulled it as close to the insurance principle as he could, in the face of the clear-cut recommendations of last year's committee and in the face of the views of the Minister of National Health and Welfare.
As a matter of fact, as I said a moment ago, I see inconsistencies in some of the things the Minister of Finance himself said. On page 388 of Hansard he said:
I shall not burden the house with the results of considering various other miscellaneous kinds of taxes. It will be sufficient to say that in the final result, after surveying the whole field, it seemed

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most sensible to utilize the main taxes which at present support our revenue systems, namely, sales tax, individual income tax and corporate tax.
So far so good. The Minister of Finance was there saying that we are going to finance old age security on the same tax basis as we finance other government responsibilities and1 obligations. But then we go a little bit further and we find he vitiates the accepted principle of government taxation by putting in the income tax a maximum of $60 per year which does not appear anywhere else in any system of government taxation.
That reminds me, Mr. Speaker, of the fact that in last 'year's committee this whole question was discussed. I admit it was not discussed at length, but it did come before us on Wednesday, May 24, 1950. In that connection I have in my hand a copy of the minutes of proceedings and evidence for that day. The witness was Mr. Mitchell Sharp, who was then director of the economic policy division of the Department of Finance. Mr. Sharp presented to the committee a number of tables showing how the various kinds of taxation would raise money, and indicating the amounts to be realized by various schemes of taxation.
One of these sets of tables gave us the amount to be raised by a certain tax rate if there were no maximum; then if there were a $25 maximum; and then if there were a $50 maximum. I find that this question of whether or not there should be a maximum was discussed by only three members of the committee, all of whom are in the house at the present time. They were the member for Spadina (Mr. Croll), the member for Eglinton (Mr. Fleming) and myself. It will not be any surprise to the house when I say that I opposed the idea, and made it quite clear that I was scandalized at the thought of a maximum being set on the amount to be paid by the wealthy and by those in the upper income brackets.


Jean Lesage: You were the only one who was scandalized.


Stanley Howard Knowles: Let us see about that. The member for Eglinton did not say very much on this point but it is quite clear, from what appears on page 967 of the committee evidence, what was in his mind. It reads:
By Mr. Fleming:
Q. On table 7, Mr. Sharp, you have given us a maximum of $50 and a maximum of $25. What period would that cover? A. That is in a year.
Q. $50 in a year as a maximum? A. Yes.


Donald Methuen Fleming: Was it in that tone of voice?


Stanley Howard Knowles: The member for Eglinton (Mr. Fleming) wants to know if it was in that tone of voice. I ask him to note his next

question and see if it does not suggest that it was in that tone of voice.
Q. Have you got calculations for a higher maximum contribution?
In other words, the member for Eglinton
was-


Donald Methuen Fleming: Looking for information.


Stanley Howard Knowles: No, he was amazed at the suggestion that a tax of this kind would have a maximum of $50. The maximum in the bill is a little higher, since it is $60, but the principle of a maximum is still there.
The member for Spadina (Mr. Croll) had something to say about it as well. It is difficult to put his remarks together because they occur at three different places. On pages 963, 964 and 965 of the minutes of evidence he does say quite clearly that he does not like this idea of a maximum. I shall point out in a moment that the member for Spadina went even further. Just to put something on the record to show what he thought, this is found on page 965:
Then we should not be far wrong, it seems to me, if we followed the same principle with respect to social security. We would be following pretty well the laid-down principle of any governmental taxation?
Mixed into this discussion as to whether or not there should be a ceiling on the amount paid was a discussion as to whether we should adopt proportional taxation or graduated taxation. Proportional taxation is the kind the Minister of Finance has introduced, except that he has truncated it, namely 2 per cent across the board. Graduated taxation is the kind where the percentage rates go up as you get into the upper brackets. The member for Spadina very clearly joined me in saying that for social security we should follow the same principles that are applied in general taxation, namely, the graduated idea rather than the proportional idea. The member for Eglinton did not take too much part in that phase of the discussion. I have already indicated that he expressed amazement at the suggestion there should be a maximum. That is about all there is in the record of the old age security committee by way of a parliamentary discussion of this question. There were three different political parties speaking, none of whom liked the idea of a maximum on the amount to be paid by the wealthy.
The member for Spadina and I were both quite clear that we wanted graduated taxation rather than proportional. Who won: the members of parliament, speaking for the people on an important committee, or the Department of Finance? Look at the bill. The Department of Finance won hands down.


Donald Methuen Fleming: They always win.


Stanley Howard Knowles: Not only did they reject our contention that it should be graduated taxation, but they even cut proportional taxation off at $3,000 taxable income. I am glad to see the hon. member for Spadina (Mr. Croll) nodding his head in approval of the way in which I am quoting him, and I hope that he will get into this debate at the appropriate opportunity and confirm the position that he took last year. 1 think he was absolutely sound when he said, as I have already quoted him, that we should not be far wrong, it seems to me-and these are the words of the hon. member for Spadina-if we followed the same principle with respect to social security. We would be following pretty well the laid-down principle of any government taxation.


James Sinclair: In that case why not pay it right out of taxation, as the Minister of Finance (Mr. Abbott) remarked?


Stanley Howard Knowles: As a matter of fact, I have no objection to that idea.


James Sinclair: The logic would be right.


Stanley Howard Knowles: Perfectly right. The point is that the Minister of Finance is trying to get as far away as he can from the idea that the hon. member for Coast-Capilano (Mr. Sinclair) has now attributed to me, which I think is a fairly good principle. He is trying to get as close as he can to the benefit idea, to the insurance principle.


James Sinclair: Hear, hear.


Stanley Howard Knowles: The hon. member says
"hear, hear". The Minister of National Health and Welfare (Mr. Martin) has already pointed out that if you follow the insurance plan or the benefit plan, it becomes necessary to supplement it with a means test plan. I will admit readily that this is not clearly the insurance or the benefit kind of plan such as they have had in the United States and which the Minister of National Health and Welfare was talking about, but it approaches it. Oh, don't shake your heads over there.


James Sinclair: Name the head.


Stanley Howard Knowles: It is the other head. To the extent that it approaches the benefit plan or the insurance plan, the government will find it necessary to keep down the amount of the pension; and to the extent that the amount of the pension is kept down you will have a clamour for supplementing it on a means test basis.
In this legislation we have got away from the means test. Let us not do the kind of thing that would make it necessary for that means test to be brought in again. The 94699-40
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parliamentary assistant to the Minister of Finance is following me, and I thank him. With respect to his minister I want to say again that when he started to talk about financing this plan the other day, he expressed sentiments which the hon. member for Spadina must have thought would be sentiments he could defend when he said: I think that it is well to stay with the same methods of taxation that support our existing governmental expenditures. But he did not stay with even the kind of taxation that the government already has. He took the one form of taxation which comes closest to home, the one form of taxation of which our people are most conscious, namely, the individual personal income tax, and changed the basis completely. He got away from the graduated scheme that runs through our income tax and put it on a proportional basis; and then to make it that much worse, he cut it off at the maximum of $60.
The hon. member for Coast-Capilano remembers how, in our discussions last year on the defence surtax, he took pleasure in pointing out to us that the defence surtax was not only a graduated tax but that it was a graduated, graduated tax-


James Sinclair: There was no pleasure in it.


Stanley Howard Knowles: -because it was a percentage of percentage rates. Now when we get to old age security we go to the other extreme. As I say, Mr. Speaker, I wanted to point out that it seems to me that the Minister of Finance has not got the spirit and the heart of this report as well as has the Minister of National Health and Welfare.


Paul Joseph James Martin: If my hon. friend will allow me to interrupt him, I should like simply to say this. I happen to know of the interest of the Minister of Finance. I know of the long hours he has put in on the matter. The suggestion that one member has a greater interest in this matter than any other is not I believe a good comment. Certainly in this particular instance it is wholly inaccurate.


Stanley Howard Knowles: It is not a matter of interest. It is a matter of the views that they have expressed-I am talking about the two ministers-as to the way to handle this problem of old age security. The Minister of National Health and Welfare has quoted the views that were expressed by the committee. The Minister of Finance, in my judgment, has done his best to move in the direction of the benefit or insurance principle which the Minister of National Health and Welfare pointed out has these serious shortcomings.

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While I am speaking of this $60 limit, may I point out just one of the anomalies that emerge when you get away from the across-the-board principle. The bill says that every individual taxpayer is to pay whichever is the lesser, either $60 a year or 2 per cent of his taxable income. I ask hon. members to consider what that does to a married couple where both are working. There are many cases in which the wife is working because of the necessity to earn additional income. If a married man is making $10,000 a year and his wife is not working, he will pay only $60. If he is earning $10,000 or $50,000, or whatever the amount is, his maximum tax will be $60. But in the case of the married man who is earning $4,000 a year and where his wife has gone out to work and is making $2,000 a year, just figure out what happens. The married man will pay the maximum of $60 because he has only $1,000 exemption. The wife will also pay $20 on her $1,000 taxable income. In other words, between them, they will pay a total of $80 in taxes. Therefore you have a man and wife with total income of $6,000 required to pay $80 in tax for old age security purposes whereas the millionaires and all the rest of those in the higher income brackets, provided their income is in the name of one member of the family only, have a limit of $60 a year.


James Sinclair: On income tax.


Stanley Howard Knowles: Right.


James Sinclair: There is no limit on sales tax.


Stanley Howard Knowles: The hon. member keeps talking about the sales tax. But the plain fact of the matter is that I am comparing two sets of married couples as to the amount of income tax that they pay and that is the one that comes closest to home. If he thinks that by referring to the sales tax he can justify the fact that one couple making $6,000 has to pay $80 tax and another couple making $50,000 or $100,000 pays only $60, he will have a difficult job.
I notice, Mr. Speaker, that you are getting ready to deliver a little message to me so I will just draw these remarks to a close. I had many other things to say, but I will not impose on your generosity. I want to say that I was glad to get the announcement from the Minister of Transport (Mr. Chevrier) today that rule 9 in the Canadian National Railways pension rules will not be applied so as to interfere with the rights of railway pensioners to draw their railway pension as well as their old age security.
If time had permitted I would have had something more to say about burnt-out pensioners, but I will not open up that subject.

Some of my colleagues will deal with it, because I feel that it is one matter that we certainly have to deal with.
In closing, I just want to say that no one can overestimate the importance of this legislation, and I take second place to no one in praising the excellence of the idea that is woven into the report of last year's committee and which is at the heart of this legislation, so far as the pension principle is concerned and so far as the pay-as-you-go idea is concerned. But it is so important and so good, and is such a tremendous advance in the social history of this country, that I do not want to see it vitiated by moving at all in the direction of the benefit or insurance principle. I do not want to see us get off on the track which would make at all necessary any return to the means test, even on a supplemental basis. Rather I hope that we will take what we have today, build on it and improve on it; that we will increase the amount and that we will review this whole taxation principle that has been written into it until we have the kind of system that will lay the basis for old age security, and for overall social security, including adequate provision for health. I believe that these things are the right of our people. They are not handouts. They belong to them on the basis of the wealth' they produce. I believe it is the destiny of our way of life to move in that direction.


Frederick Davis Shaw: Mr. Speaker, since I have so recently expressed the views of myself and my colleagues relative to the matter before us at the present time, it would seem unnecessary to take more than just a few moments to say the things which we think should be said at this time. Last week, when speaking upon the resolution, I spent some time explaining my observations in the house in connection with the amount of pension. Today I desire to devote another moment or two to that same subject. Before doing that, however, may I repeat what I said before, namely, that we do look upon this measure as a forward step. We feel that inasmuch as the universal principle has been applied to those over 70, inasmuch as we have moved to age 65 in order to provide some measure of assistance to those between the ages of 65 and 69, it is good. We have never felt, however, that we should be called upon to regard any bill as rigid or fixed or permanently established in the sense that it cannot be changed when hon. members regard change as essential.
The mere fact that in 1950 we did, in seeking a compromise basis of agreement, support the $40 a month payment does not mean that we should not change the amount today. I

would remind the house that that $40, as far as I can recall, was more or less picked out of the air. It is true that our pensioners were in receipt of a basic pension of $40 a month, but I cannot recall that any attempt was made to justify a payment of $40 a month by taking a typical budget, or by trying to analyse the basic requirements of our pioneer citizens. It was, as I repeat, more or less picked out of the air. The various organizations which appeared before the committee expressed different views in relation to the amounts, but with all was this general idea advanced by the financial experts of the government: we must proceed with caution; we must recognize that this is a new thing. It is going to involve heavy expenditures, and little experience has been had with respect to it up to this time. Therefore we must be extremely careful in that we do not set an amount that is too high before a certain amount of experience has been acquired.
Prior to June, 1950, my colleagues and I took the position that, in the light of living costs, $40 a month was inadequate as far as a great many of our pensioners were concerned, namely, those having very little, and certainly not more than $120 a year of outside income. We had pressed, prior to June, 1950, for an upward revision in the amount of the pension. We could not help but contrast the pensioners in certain parts of Canada with pensioners in certain other provinces of Canada. For example, we knew that in British Columbia certain supplementary benefits had been paid to the pensioners. In my own province of Alberta they were receiving $10 a month supplemental payment. That was paid to all pensioners regardless of the amount of pension for which they found themselves eligible. In other words, a pensioners receiving the basic $40 a month received the $10 pension, and/or if he were receiving $2 a month out of the basic pension he also received $10 supplemental payment with no means test, of course, as applied to that supplemental payment. On top of that there were the medical, dental, optical and hospital services which I understand were supplied in British Columbia, and then Saskatchewan had this bonus system. I believe a lower supplemental payment was made, and I am not too certain of all the facts relative to their medical or hospital services. But in other parts of Canada, where the average pension payment within the province was extremely low in relation to the maximum payable in these three provinces there was no supplemental assistance outside of what we might call municipal assistance to meet hospital or doctors' bills. I remind the house that prior to June, 1950, we did 94699-401
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not regard the $40 a month payment as adequate. Conditions which have developed since June, 1950, have served only to confirm our conviction that the $40 is not adequate.
In checking the evidence, I notice they suggested rates of pension ranging from $30 a month to $60 a month; that is, as far as the seven organizations which gave evidence before the committee are concerned. The lowest rate of $30 was recommended by the Canadian Chamber of Commerce as a tentative and exploratory measure. I am not surprised that the lowest amount recommended came from that organization. Of course they used the argument that this amount should be increased after a period of administrative experience. They also drew attention to the government's present budgetary position, rising defence costs and so forth. Of course I could say that we could look at the government's budgetary position today, and I am sure that even the Chamber of Commerce would have to admit that its budgetary position is such as to make a proposed $30 a month appear almost ridiculous.
The Canadian Welfare Council would set the minimum rate at at least $40 a month, and I underline the words "at least"; but they suggested a review of the amount in terms of a minimum standard of health and decency after a careful study of living costs. To me the Canadian Welfare Council hit the nail squarely on the head. Let me repeat, "an amount in terms of a minimum standard of health and decency after a careful study of living costs". It does occur to me, Mr. Speaker, that hand in hand with a proposition such as is contained in this bill, some branch of the minister's department should be working constantly with respect to this matter of living costs in relation especially to our pioneer citizens.
The Canadian Association of Social Workers also followed the approach of the Canadian Welfare Council, but they recommended no specific pension rate. If I recall correctly, they were particularly anxious that the pension should bear a fair relationship to the cost of living so that health and decency could be made to prevail. Therefore they were not keen about setting a specific amount.
The Canadian Life Insurance Officers Association, while not opposing the $40 pension, believed this rate rather high in relation to more or less average expenditure on goods and services, and suggested that most elderly people have some personal savings or other resources. The Canadian Congress of Labour, on the other hand, severely criticized the

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existing $40 pension, particularly in the light of national income of nearly $13 billion. They proposed a $50 payment as a moderate figure. We had the trades and labour congress also. They pressed for a $60 pension, and they contended that the present average income of the working population and the present-day living costs justified that amount. It must be said that while the figures submitted by the various organizations were not tied strictly to the statistical computation of living costs, certainly I think they appreciated the fact that experience had taught us that the $40 per month which had been payable was inadequate.
I feel very much as does the hon. member for Winnipeg North Centre (Mr. Knowles) in connection with these supplementary payments. I notice on page 72 of the report of the joint committee the following:
All organizations considered that some type of supplementary assistance would be required to meet the residual income needs of older persons. Both the Canadian Association of Social Workers and the Canadian Welfare Council favoured payment of such supplementary assistance on the basis of need through adequate programs of public assistance at provincial and/or local levels; the Canadian Welfare Council submitted that such programs should be assisted by federal conditional grants-in-aid.
I shall not read any more than that. While I have no objection to the provinces granting whatever assistance they feel they should to recipients of pensions, I submit that we should endeavour to provide a national pension scheme with an eye to setting an amount and establishing conditions which, as the Canadian Welfare Council indicated, will provide a minimum standard of health and decency.
We realize, and I said so last week, that it is not a problem easy to solve because we find such a variation in conditions as between urban and rural communities and as between the cost of housing in one community as compared with the cost in another. It is quite conceivable that local governments will find it necessary to come forward with additional assistance. I am convinced they will have to if we continue to pay $40 per month under conditions such as prevail at the present time.
I hate to think of the introduction into our universal old age pension system of anything even remotely resembling a means test. It has taken us long enough to get rid of that as far as it has applied to one group of our Canadian people. Of course our objective is that when conditions permit we should get rid of the means test as applied to those in the 65-69 age group and not bring

it back in another form as far as it applies to the group from which we have been able to eliminate it.
Last week I indicated that I did not intend to say very much with respect to the Minister of Finance (Mr. Abbott) relative to financing. However, I was interested in one assertion he made, and if he were here today I would probably ask him for an explanation. He said there was only one way to meet the costs, that we would have to take the money out of the pocket of one person through taxation and pay it to another person. I have been following the Ontario election campaign rather carefully and I notice that a hospitalization plan is to be provided by Mr. Walter Thomson, the Liberal leader, if and when he is elected, at a cost of $30 per month to be procured by taxation. He has stated that if it costs more the money will be secured elsewhere. I would like to ask the Minister of Finance if he and Mr. Thomson have ever got together in order to establish whether their views are uniform, because what Mr. Thomson has been telling the electors of Ontario is not at all like what the Minister of Finance said here last week. The Minister of National Health and Welfare (Mr. Martin) says it looks as though he is going to win the election. I do not know how much he would be prepared to put on the line in that connection. I realize that he is looking at things through Liberal eyes.
I am rather surprised that the Minister of Finance placed a $60 ceiling on the amount to be paid by the Canadian taxpayer in the way of income tax. We have always recognized that under our system of taxation the income tax is probably the fairest tax inasmuch as it is based upon the principle of ability to pay. We wonder if it would not have been possible and much fairer for the minister to have forgotten about that ceiling and at the same time have forgotten about the 2 per cent sales tax that is to be earmarked for this purpose. We have no indication as to what the revenues would be from the 2 per cent sales tax; therefore we would like to see a breakdown of that and a comparison with the revenue anticipated to be obtained from the 2 per cent income tax. We have always taken exception to the sales tax, as did the Liberals for years except when it suited their own purposes to use it. I believe it was a year ago last February that I went back into history to 1930 and quoted prominent Liberals who had condemned the sales tax. They could condemn it when they set out to do so. They reduced it to about 1 per cent in 1930, and then from 1930 to 1935 they called it just about everything you could

find in the dictionary in the way of adjectives. In the spring of 1936 when they brought down their first budget after the election they immediately jumped the thing and imposed an additional $26 million upon the people. It has been going up ever since. As I said the other day, I object strongly to giving this sales tax some complexion of permanency and some degree of respectability which I do not think it should be given. I would far sooner see no ceiling placed upon the 2 per cent income tax and eliminate if possible the earmarking of 2 per cent of the sales tax.
Listening to the minister I could not help but wonder why, when information from the bureau of statistics is used to prove age, they have to go back thirty years or more. After all, twenty years' residence in the country is all that is necessary to establish eligibility. If the thirty-year stipulation is enforced it will deprive many of our pioneer citizens of this pension. Over the years many of us have found that we have had to fall back upon that source of information. There have been cases of fire where every available document has been destroyed, where nothing was left with which to establish age, and it has been necessary to fall back on the census records. A man may have entered the country in 1927, 1928 or 1929. He would be recorded in the 1931 census, in the 1941 census and I assume in the 1951 census. Unless this stipulation, like the $40 per month, was more or less picked out of thin air, I cannot understand why it is imposed. There is another matter which rather interests me. We do not know what regulations have been devised prior to this time or are going to be devised to operate hand in hand with the act, but if regulations have been drafted I should like to ask the minister whether they will be submitted to the house or at least made available to the members. So frequently we find that regulations have the effect of making an act say and do not what we thought but almost the opposite. Therefore I think it is most important that we be given at least a glimpse of the regulations.
We are content that it be a universal pension to those over seventy. Government officials have asserted that because of the contributory aspect a man's dignity is to be maintained. He is going to feel that after all this is his, that he bought it. Nevertheless the government is already laying down innumerable regulations under which a person may be deprived of the pension. That is a matter which we intend to pursue when we are considering the bill in committee. We want to know more about the conditions under which a man can be deprived of a pension
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after he has contributed toward the purchase of it for ten, twenty, thirty, forty or fifty years. I think this is a matter to which the house should give careful consideration.
I should also like to refer to the question of war veterans allowances and their relation to this legislation. Much has been said on this subject. Last week the Minister of Veterans Affairs (Mr. Lapointe) was asked a number of questions. I heard or read the questions and either heard or read the answers. I have tried to weigh one against the other and I am still somewhat confused, as many members must be, with respect to the actual status of the recipient of war veterans allowance in relation to old age security. I know the minister said it is hoped that certain things will be clarified at the next session by the committee on veterans affairs. I still protest against leaving this matter until that time even though the benefits that may accrue to a recipient of war veterans allowance may be payable from January 1. That is conceivable, but this committee may not report until May or June. Between now and next May or June the war veteran will be in a state of confusion as far as-


Paul Joseph James Martin: I do not want to interrupt my hon. friend, but I want to make it clear that the place to make that argument is not on this bill. This is a bill to establish old age security under which there would be no excluded group. I am sure my hon. friend does not intend to go on much longer, but I want to put myself on record in case I might be accused later on of not having taken the position at the outset that this is a matter that should be discussed under the proper legislation.


Frederick Davis Shaw: I realize that. Possibly I was led off the track by the fact that representatives of the Department of Veterans Affairs appeared before the committee to answer questions and make certain submissions, and also because reference is made in the committee's report to war veterans, especially those in receipt of war veterans allowance. I shall not pursue the matter. I only regret that we are leaving these men in a state of confusion so far as their knowledge of what may happen to them is concerned. It is a condition of complete uncertainty, and even though we may make the benefits retroactive later on we are not creating a very happy situation for the present so far as they are concerned. I shall not take more time. In case we may be misunderstood, let me repeat that [DOT] this is definitely -a forward step. We appreciate the new benefits that are to accrue. I hope we will be excused if we feel that in some respects probably certain things could be done

Old Age Security
a little better or that methods could be employed which we think would meet the purpose more adequately, fairly and suitably.


Mr. George H. Hees (Broadview):: Mr. Speaker, I agree 100 per cent with what the hon. member for Eglinton (Mr. Fleming) and other members have said about the necessity of bringing up the question of war veterans allowances at this session. It is now proposed that it be put off until the next session. I feel it is a vitally important matter.


Paul Joseph James Martin: Mr. Speaker, I do not want to raise the point of order I mentioned to my hon. friend who spoke a few moments ago, but under the existing legislation no one is excluded. As to the benefits that may be provided for a particular group under other legislation in existence or in contemplation, surely under the rules of the house that is a matter to be discussed at another time and not on this bill.


George Harris Hees: I sincerely hope, as I say, that the matter will be brought up at this session. Speaking on the resolution stage of the bill a week ago I pointed out to the minister that a great many applicants for old age pensions have no other proof of age than statements in very bulky family bibles, and that these people are being subjected to a great deal of trouble, expense and inconvenience in having to send these family bibles considerable distances to have the notations therein verified by the department. I suggested to the minister that if applicants for old age pensions were allowed to take their family bibles to the nearest crown attorney or judge, he could sign an affidavit to the effect that he had inspected the f amily bible and that certain statements were contained therein showing that the applicant had been born on a certain date. I suggested that such a statement, by either a judge or a crown attorney, shonM be just as satisfactory evidence to the department as inspection by one of their clerks.
The minister replied that he was not willing to accept the word of a judge or crown attorney. To me that is a completely ridiculous situation. If you cannot accept the word of a judge, whose word can you accept? Why is the word of a clerk in the Department of National Health and Welfare any more trustworthy than that of a judge? When the family bible comes to the department it certainly is not the minister or deputy minister who inspects it. It is one of the clerks in the department, and he says whether or not the proof is satisfactory. To my mind, if a judge says that he has inspected a family bible, and

if he certifies that a certain statement is contained therein, that should be satisfactory to the department as proof of age.
By his attitude in this matter, I believe the minister has shown a complete disinterest in the very real inconvenience and expense to which old people applying for pensions are subjected at the present time. It is one more example of the sort of thing that happens when a government has been in office too long and builds up a bureaucracy around it. When that happens, people cease to count as human beings. They simply become names in files, whose duty it is to fill out forms and obey orders. This attitude towards the people was one of the reasons the government was defeated in the last four by-elections. In one case the reversal of votes was as high as 8,000. I believe the people are fed up with the kind of arrogance with which they are being treated, and the more by-elections we have, the more people are going to continue to show their resentment. I think-in fact I l^ov^that the minister is really a very nice fellow when he gets out of the bureaucratic atmosphere of his ivory tower. I sincerely hope he will reconsider this matter, because it is very important to a great number of people in rural areas who are applying for the old age pension. I am sure that, after thinking this matter over, he will decide to treat old people as he himself would like to be treated if he were in their place.


Paul Joseph James Martin: I am sure my hon. friend would permit me the opportunity to make this interpolation, because I know he is as anxious as every other member in the house, regardless of where he sits, to see that those who are entitled to this old age pension, get it. There is no confusion whatsoever. We are experiencing no real difficulty, as my hon. friend suggests. Let me give an example. My hon. friend spoke about bibles. I said the other day that only 1 per cent of the people who are seeking to establish the right to old age pensions have offered proof of birth through bibles. All sorts of methods are being used. And just so my hon. friend and his friends will not go out and indicate that we who are administering this legislation are a heartless and cruel bunch, and so that his words will not have the effect of discouraging people from coming in, I wish to give an example of the attitude of the applicants themselves, as well as of our attitude.


Mr. Casselman:: Whose speech is this?


Paul Joseph James Martin: My hon. friend was good enough to agree, and I know why. What I have here will show the spirit behind the applicants, and our spirit in the matter. I hold in my

hand a medal received from a woman in Am-prior. This medal, awarded to the lady, whose name I shall not give, was from the Arnprior high shool. On the back it bears the notation, "First class examination, July, 1887." There was not any hesitation in this instance: we accepted this as proof of her qualifications, and accepted it at once. There was no effort to be cruel or difficult. We did our best, as she did her best.
I know my hon. friend would not want to convey the impression that people are finding it difficult, because we have had no experience of difficulty along the line he has suggested.


Arza Clair Casselman: There is great difficulty.


Paul Joseph James Martin: If my hon. friend will bring the difficulties to my office I shall do whatever I can. But when we realize that in less than three months we are ready to pay 500,000 people out of a possible 700,000, we must realize the extent of the facilities for examination which have been provided. I thank the hon. member for allowing me the interruption. I know that is what he wanted me to do. It is not complete, but it complements his speech.


Mrs. Fairclough:: May I ask the minister-


James Sinclair: Whose speech is it?


Ellen Louks Fairclough: In view of what he has said, is the minister prepared to accept a marriage certificate dated 1889?


The Acting Speaker (Mr. Beaudoin):: Order.


Arza Clair Casselman: No, no.


The Acting Speaker (Mr. Beaudoin):: In the
first place, the hon. member for Broadview (Mr. Hees) has the floor.


Some hon. Members:: Hear, hear.


The Acting Speaker (Mr. Beaudoin):: It was
with his -consent that the Minister of National Health and Welfare gave some explanation. The question now asked by the hon. member for Hamilton West (Mrs. Fairclough) would more properly be asked in committee of the whole on the bill.


Ellen Louks Fairclough: I shall repeat it at that time.


George Harris Hees: Mr. Speaker, the minister has said that the department is doing all it can to handle these applications as quickly as possible, and I am glad to have that assurance. But I do not think we can quite accept his statement that there is no trouble. I have seen many letters from people living in rural areas who have had great trouble in having their applications accepted. The point I made was, I believe, a reasonable one. I had referred to the trouble many people have been caused because of large and bulky, and also
Old Age Security
very valuable family bibles, which in many cases contain statements of the births of various members of one family located in various parts of the country. The difficulty in connection with the use of the family bible is a real one. I do suggest that the minister consider favourably the suggestion that these people should be allowed to take these bibles to crown attorneys or judges. I am suggesting that the word of those public officers should be accepted. Let the bibles be examined by them and, if found satisfactory, an affidavit could be supplied stating that certain statements had been found in the bibles in question.
I believe this a reasonable suggestion, and one which would eliminate many of the difficulties some people are having. These people are old, many of them are not in good health, and they are worrying about receiving their pensions. It is up to us to make things as easy as we can in every way. I am sure the minister is doing a great deal to help the applicants. This is one instance where I think something more could be done, and I am sure it would be appreciated if my suggestion were accepted.


Mr. A. Earl Catherwood (Haldimand):: Mr. Speaker, I do not wish to take up the time of the house unnecessarily, but I rise at this time in support of the remarks of the hon. member for Broadview (Mr. Hees). Before proceeding, however, I should like to say how greatly our citizens appreciate this measure, which is welcomed by all people across Canada. This legislation, which I hope will be accepted unanimously by the house, is the result of a recognition and understanding of the needs of our older people. Concrete action is now being taken following a review of the situation by a parliamentary committee, the work of which has been most gratifying indeed. Let me take this opportunity to compliment all those who served on the committee upon their diligent and untiring efforts in bringing this matter to the point where we in this parliament can debate the measure in detail. As a result of their recommendations this bill is now before us. Perhaps it is the greatest piece of social legislation that has come before a Canadian parliament since confederation. The minister has well said that this higher level of living will result in better health among those receiving the benefit of the pension. I believe it will also eliminate the fear of poverty, perhaps the greatest fear so many of our older people feel as they approach the sere and yellow leaf of old age. They will be more contented in their passing years, with a happiness that should be the lot of all our people.

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I believe the minister was sincere in his remarks, and fully believes that the work in connection with instituting this pension program is being carried out expeditiously. However, I was in my constituency over the week end and had to meet a barrage of questions from older people who are making application for pensions. They were asking why they have to fill out all these forms and why are they being rejected. Perhaps the minister is not fully aware of the situation in the rural areas. I would hope that some uniform example would be sent out to the regional directors so they would know where they stand. I am in sympathy with the recommendation of the hon. member for Broadview (Mr. Hees) that crown attorneys and judges in various counties should be permitted to pass judgment upon notations in bibles they are shown. I do hope that the minister will consider carefully the recommendation made by the hon. member.


The Acting Speaker (Mr. Beaudoin):: Perhaps I should point out that the second reading stage of a bill is the stage when it is proper to enter into a discussion of the principle of the measure. On the motion for second reading it is out of order to discuss sections of a bill. I would refer hon. members to citation 656 in Beauchesne's third edition, and ask them to keep it in mind during the debate. If they enter into a discussion as to the interpretation or the application of a section, then they are not discussing the principle of the bill. Such details can be considered in committee. I believe what I have said reflects the sense of the remarks made a moment ago by the Minister of National Health and Welfare.


Mr. H. W. Herridge (Kootenay West):: I have taken a great interest, Mr. Speaker, along with many other members of this house, in this very important matter of old age security. I am going to take this opportunity to make a few observations. Before doing so, however, I should like to quote from a small pamphlet, a copy of which I believe most members of the house received, entitled "The Proposed Old Age Pension", which is published by the Canadian Tax Foundation. I find that this is a non-profit organization established by the Canadian Bar Association and the chartered accountants.


Mr, Martin:: That is the one written by Professor MacGregor.


Herbert Wilfred Herridge: Yes. I want to read one paragraph in the introduction to this pamphlet to which I take strong objection. It reads:
It now seems likely that the bill will be slipped quietly through a well-disciplined House of Commons, whatever its provisions, so long as it pays
[Mr. Catherwood.I
forty dollars monthly, for reasons sufficiently obvious and reminiscent of the family allowance of 1944. None of the opposition parties can be expected to look the gift horse in the mouth, nor can the Senate, although that is its peculiar function. In these circumstances, the nation cannot count on effective parliamentary criticism.
I quote that, Mr. Speaker, because I take strong objection to it. I think it is a reflection upon the members representing all parties in this house. I am quite sure that it is proven untrue by a perusal of the records of this house concerning the many questions that have come before it throughout the years, and by the debate that is now in progress on this measure.
There is no doubt about it, this legislation represents an historic step towards the building up of an adequate social security program in this country. I would say that this bill brings at least to partial fruition the work of a great many members of this house, past and present. I am sure that many of us here can recall hearing of the debates, and reading the debates, of years past in connection with old age security, and of the work members of all parties in this house did to promote the program which finds partial fulfilment in this bill we are discussing now. Then many Canadians and many organizations throughout Canada have taken a great interest in this question. I believe we should recognize the effect their conduct has had on the bringing into this house of the proposals contained in the bill we have before us this afternoon.
I should like also to pay tribute to the work of the parliamentary committee. I read the report, and I listened to a few of the discussions when the committee was sitting. But I was surprised to find that even in some of the remote spots of my constituency there were people who had followed the proceedings of that committee. I remember going to one isolated spot where a man living in a log cabin on the side of a swiftly flowing mountain stream some twenty-five miles from his nearest neighbour told me of having closely followed the work of the parliamentary committee on old age security. I had other instances of the close attention paid to the work of that committee. This indicated to me that the problem was one of prime importance, of direct and personal importance, to many people in this country.
I am sure we all rejoiced to learn that the means test had at last been abolished. I believe that is a great forward step. I am sure we all rejoiced in knowing that this plan is being put forward on the basis of a universal pay-as-you-go scheme. I am sure that receives general support. We are all glad to

know that the principle of this bill at least has the unanimous support of all members of the house.
Without a doubt this legislation will lift a shadow that has darkened the lives of many of our senior citizens. This will be accomplished by the removal of the means test. During the years prior to being a member of the British Columbia legislature and a member of this House of Commons, I learned from personal experience the worrying effect the means test had on a good many of our old age pensioners. Just before coming to this house I remember speaking to an old gentleman who was telling me about his invalid daughter and his ailing, invalid wife. They were not ill enough to require hospital treatment or treatment in an institution, but merely ill enough to be unable to do the things that normal people could do. This old chap had gone to work with a department of government in British Columbia to earn a few dollars. He told the department that he did not want to disobey the provisions of the Old Age Pensions Act, and they were to let him know when he had earned the maximum amount. The department failed to let him know, and for three years this old gentleman earned somewhere between $80 and $90 per year more than he should have earned. Suddenly he was confronted with the fact that he had been overpaid. Deductions were made from his monthly cheque, and he was left with a small amount per month on which to live. He was unable to earn any more. He said to me:	"No one will know what the
removal of this means test means to me and my family". There must be thousands of cases like that.
I remember on one occasion some years ago an old lady of 89 showed me a letter she had received from the old age pension board in which they advised her they were going to cut off her old age pension because she had not reported her earnings of the previous year. I am very glad to know that this sort of thing is finished with abolition of the means test. I am sure the provincial and federal officials who were responsible for the administration of the old age pension legislation will rejoice, along with the members of this house, in the abolition of the means test. However, I do not think that under the circumstances we, as members of this house, should flatter ourselves to any great extent over some provisions in the bill.
I thought the member for Winnipeg North Centre (Mr. Knowles) made an excellent speech this afternoon. He made a careful analysis of the criticisms of this bill according to the viewpoint of the party to which I belong. I am not going to attempt to repeat
Old Age Security
his criticism in full, but I do want to deal with two major criticisms from our point of view.
We believe, in the first place, that the $40 per month is insufficient. I believe the member for Winnipeg North Centre was quite correct when he said that if $40 per month was sufficient in 1949, then because of the increase in the cost of living since that date about $50 per month would be required to equal the pension recommended by the committee. The second major criticism we have is that there is a ceiling on the personal income tax of $60. The member for Winnipeg North Centre dealt with that question at some length. I am not going to deal with it at any length, but I do want to deal with the amount of pension proposed in this bill. In doing so I should like to .quote from the minister's remarks when he was speaking on the resolution. I quote from page 379 of Hansard:
To these criteria we must attach the greatest importance; for in all our efforts to achieve social justice through such measures as this, there is one thing that we must never forget. There is no magic formula for social security. It can be provided only through work. It cannot be too strongly emphasized that social security has to be paid for out of production. It is the people themselves who -through their hard work-provide governments with the financial resources to maintain these social services.
The weight of each new social measure must be considered in relationship to the need for it and to the capacity of Canadian income earners to carry this added responsibility. To overburden our working force endangers the stability of our economy- which provides the primary basic security that individual social measures can only serve to reinforce.
I agree largely, Mr. Speaker, with what the minister has to say in that case. In fact he emphasizes the point that social security and increased social security is provided out of production. We in this group agree absolutely with that point of view. But I want to bring to the attention of the house the fact that the production of this country in 1926 was about $5 billion. According to the figures given by the Minister of Defence Production (Mr. Howe) the estimated production this year is about $20 billion. We all recognize the fact that at the present time the dollar is worth about 50 cents. As a matter of fact, then, in this bill we actually give the pensioners, in purchasing value, about the same as they were being paid in 1926 or 1927. Allowing for the fact that the dollar has decreased in value to 50 cents, although the dollar value of our production has multiplied four times, without question in reality our production has multiplied twofold. We have doubled our production, yet in this bill we make provision actually to give the old age pensioner practically the same purchasing power he was given in 1927. I do

Old Age Security
not think the benefit under this act indicates that the old age pensioners are being paid in relation to the increased production of this country at this time. I remember that during the 1945 election the Liberal party had large posters throughout the country on big billboards saying: Vote for the Liberal party and the new social order. Surely you cannot say this is a new social order when, in 1951, you are bringing forward a bill that aims to give our old age pensioners almost the same, in purchasing power, as they received in 1927, though the production of this country has without question doubled.
In the government's proposals of 1945 I noted that they aimed to provide minimum subsistence. I think that statement is quite correct. When I look up the dictionary I find that the word "minimum" means the least quantity or the least part' of; and that the word "subsistence" of course means livelihood and nourishment. Hence in that respect the government is living up to the proposals as outlined in the green book of 1945 by providing the least livelihood and the least nourishment for our old age pensioners.
When I speak on a question like this, Mr. Speaker, I see not only the bill and the notes that I have in front of me. I also see many people I know in .the country who will be affected by this legislation, many of whom have been receiving old age pensions in the past. Just prior to coming to Ottawa I remember talking to a miner, a man who had mined for between forty and fifty years in Kootenay West. He worked in the mines at Rossland, in Sandon, in Slocan and in Salmo. He had given fifty years of his life to mining. He was telling me what a hard time he was having in getting along on the $50 a month he was receiving in British Columbia. That $50 is made up of $40 plus the $10 cost of living bonus paid by the government of British Columbia. For that old-timer I have extremely warm feelings, as I have for others of these old-timers in our country because to me they are a living link with an interesting past. This man told me that he had to pay $20 a month for his room and had to live on the other $30. He said he managed to do it by having coffee and toast for breakfast, by having a very light lunch, and then having one good meal a day. He said that fortunately, owing to the kindness of a Chinaman who ran one of the local restaurants, he was able to make it do, because the Chinaman charged him about half price for the larger meal at the end of the day.
Then I remember talking to an elderly widow, without sons or daughters or relatives to care for her. She told me she was having great difficulty under present conditions, and

that she was only able to carry on because of the assistance she received from old-timers in the district who knew her.
Then again I was talking to an old lumber worker, one of those old loggers who would go into the woods and take a skid horse, cut the logs and skid them to the lake. This man had worked at that type of work since the early days of logging in my constituency, and in his lifetime had cut millions of feet of timber. He was telling me what great difficulty he had to get along. May I point out that these people living in country places, in a log shack or cabin, can live more economically than persons living in the larger centres. In fact, I always tell old age pensioners that they would be well advised to go to live in a small village, or some little country town, to get a small cabin if they can, because under those circumstances living costs are considerably reduced.
Then I have in mind particularly an old gentleman whom I have known for forty-five or forty-six years. He is a French Canadian who went from the city of Ottawa to my constituency fifty-eight years ago. That would be in the days of general exploration, the first days of mining and lumbering in that area. He has packed all over the country, prospected, logged, cooked in camps and so on. As a matter of fact I have in my office a manuscript of seventy-five pages which he dictated to a stenographer quite recently, giving his experiences in the country since his arrival. That manuscript is going to be placed in the archives of Canada, and a copy is going to the provincial archives. That man has made a great contribution to the building up of the interior of British Columbia. He received the old age pension some years ago but because he happened to earn, on one occasion, $5 more in one month than he was supposed to earn, the social welfare worker at that time told him that he would have to stop this, that by earning at this rate he would lose his pension. He was an independent sort of old gentleman, so he told the old age pension visitor to relegate the old age pension to some unconventional locale and went back to work again. He worked until he was eighty-five, then finally became ill and had to take the old age pension. Now he is in poor health. He is having to do the best he can on the $50 a month which he receives in British Columbia.
I mention these individual cases that 1 know, or a few of them, because they indicate clearly the difficulties many of these good citizens will have in living on the $40 a month, plus the $10 a month cost of living bonus that is provided by the government

of British Columbia. I think the hon, member for Winnipeg North Centre (Mr. Knowles) was absolutely correct when he said that, in order to compensate for the increase in the cost of living since the committee reported in 1949, we at this time should be providing not less than $50 a month for old age pensioners.
I just want to say a few words with regard to my second major criticism in connection with this bill. Like the hon. member for Winnipeg North Centre and others, we are sorry there is a ceiling on personal income tax of $60. This means that anyone with a taxable income above $3,000 will pay no old age security tax on income above that figure. Like the hon. members who have previously spoken, I would have preferred to see the 2 per cent sales tax abolished and this extra amount raised by taxing for old age security according to ability to pay. In my opinion, Mr. Speaker, we should not view this matter as a fiscal burden, but should fully accept our collective responsibility for the welfare of our senior citizens.
We in this group believe that if we are to redistribute wealth or attempt to redistribute wealth, so as to equalize the burdens in life under this present system, cost of the old age security should have been collected completely on the basis of ability to pay. So long as you limit the amount to be contributed by any citizen in this country, millionaire or not, to $60, you are not giving effect to the principle of sharing the benefits of increased production.
Before I conclude I want to deal for a minute or two with the question of those applicants for old age pension who are receiving war veterans allowance at the present time; and I trust, Mr. Speaker, that in that connection I will be in order. I want to quote from Hansard of last session, at page 4533, where the hon. member for Winnipeg North Centre (Mr. Knowles) had this to say:
Mr. Chairman, on Friday, June 15, the minister answered a question of mine with regard to the relationship between the War Veterans Allowance Act and the new old age pension legislation, and I quote from his answer as recorded on page 4136 of Hansard:
"The matter referred to in the question asked on Tuesday by my hon. friend is being reviewed and considered at the present time."
Then again, in reply to the hon. member for Peel (Mr. Graydon), the minister said at page 4532 of Hansard:
At the present time we are considering the whole question of war veterans allowances and reviewing the act in the light of the new old age security legislation-
Old Age Security


Paul Joseph James Martin: I do not like to interrupt my hon. friend-I do not like to interrupt anyone who is making a speech-but surely he will agree that this is out of order. Indeed, as was recognized earlier in the debate,-


Herbert Wilfred Herridge: Mr. Speaker-


Paul Joseph James Martin: Perhaps my hon. friend was not in the house, but the point was made earlier that under this legislation no one is excluded. We are dealing only with this legislation, and if a particular group of individuals deserves some additional treatment, that comes under another act which is not now before the house. I think on that account the Speaker earlier in the day took the position that a discussion on veterans allowances was not in order.


Herbert Wilfred Herridge: Mr. Speaker, I should like your ruling on that point. I want to deal for a few minutes with the question of applicants for old age pensions who are at the present time receiving war veterans allowances. Would I be in order to continue on that basis for a minute or two?


The Acting Speaker (Mr. Beaudoin):: believe an understanding has already been reached on that subject. The understanding was to the effect that it is quite in order to discuss the principle of the bill but not to enter into a discussion of the details of the various clauses at this time. Furthermore, as was already pointed out, the matter now before the house is not veterans legislation. That is not the matter under discussion, and it has nothing to do with the present bill.


Herbert Wilfred Herridge: I just want to say that I have received a number of letters from veterans who are drawing war veterans allowances and who intend to make application for the old age pension. They have written to the officials of the Department of Veterans Affairs, and that department was unable to give them the information they required. We are of the opinion that the committee should have sat during this session so the relationship between the war veterans allowance and the old age pension could have been settled at this time.
I have spoken briefly on the bill. In conclusion, I want to say that we in this group regret to find these flaws in the legislation that is now before us that I have brought to the attention of the house. We hope they will soon be corrected and thereby provide an adequate security scheme based fairly on our increasing production.


Mr. J. W. Noseworthy (York South):: The
introduction of this bill must give a great deal of happiness to the Minister of National Health and Welfare (Mr. Martin). It has received a great welcome from other groups in the house as well as from those who sit

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on the government benches. As a matter of fact a lot of people are taking credit for this legislation at the present time. In reading the program which the government party in the province of Ontario is presenting to the public I was very interested to see that-


Paul Joseph James Martin: Yes, I have it right here.


Joseph William Noseworthy: -one of the first items on the program was taking credit for this universal old age pension. Regardless of who attempts to take credit for this measure certainly all groups in this house and groups of citizens, organized and unorganized, across Canada have throughout the years aimed to secure for our senior citizens the kind of pension-a pension without a means test- that is proposed in this bill; and hundreds and hundreds of thousands of our citizens will welcome this legislation.
The old age security legislation, the Old Age Assistance Act, and the revised or amended Blind Persons Act will take their places, along with other social security legislation that already exists on the statute books of this country, federal and provincial, with the workmen's compensation act, which goes back to 1914, with mothers' allowances, first introduced in Manitoba in 1916, with unemployment insurance, which was one of the constructive outcomes of the depression, with family allowances and other welfare services, with veterans programs and with such provincial health measures as now exist within the provinces with federal aid. The Canadian Welfare Council estimates that in all Canada is spending at the present time from $1 billion to $1,500 million on social welfare. That represents the great advance we have made since the turn of this century, most of which has been made, as the minister suggested, within the last quarter of a century.
I think it would not be out of place at this point, however, to call attention to the fact that our social welfare legislation is at the present time a series of piecemeal services. We still lack a comprehensive national system of social security. Now that we have achieved this score we should all raise our sights and aim next at a national system of social security that will be comprehensive and national in scope, and will make provision for the loss of income by whatever cause that loss may be incurred. At the present time there are still many gaps in our social welfare legislation. The one thing that requires immediate attention is the matter of health insurance. Never before in our history has there been a greater need for this.


The Acting Speaker (Mr. Beaudoin):: I am
most anxious to hear the hon. member speak about this old age security legislation. In the preamble of a speech it might be useful to

discuss the whole picture of social security, but as we have before us now an old age security measure, I invite the hon. member to discuss the bill.


Joseph William Noseworthy: I had intended to review the picture as far as social security legislation is concerned, and I thought this was an opportune time to do so. If you say that I am out of order, Mr. Speaker, I shall abide by your decision and find some other opportunity, possibly during this session, to say what I have to say on that subject.
There are two or three points I should like to mention in connection with this bill, which have been touched upon already by other hon. members. The minister called attention to the fact that our present social security legislation was passed during the past quarter century. He pointed out that the first old age pension cheque was mailed about twenty-four years ago. I should like to mention again, as others have, that we in this group take some credit for the success which has been achieved in the matter of old age pensions. I need only mention the part which the founder of this group, the late J. S. Woodsworth, played in bringing about the initial old age pension scheme twenty-four years ago. Down through the years he insisted that the original scheme should be improved.
The minister told us that it is a far cry from those days to the present. It is a far cry from the days when the first cheque was issued twenty-four years ago. I would like to remind the minister, however, that when that first cheque for $20 was issued twenty-four years ago it represented more purchasing power for the pensioner than will the cheque for $40 which is to be issued under this scheme after January 1, 1952. In some respects we have made considerable progress during those twenty-four years, but the actual position of the pensioner who will receive a cheque for $40 after the first of the year is no better than was the position of the pensioner who received a cheque for $20 twenty-four years ago. The purchasing power of the pension cheque to be issued next year will be less than the purchasing power of the cheques issued twenty-four years ago. That is a fact that I think we must bear in mind.
I was a member of the parliamentary committee which sat in 1950, and I agree with the conclusions reached by that committee. I think most members of the committee made it quite clear that they did not by any means consider, even in 1950, that a $40 pension was sufficient in view of the then high cost of living. The rise in the cost of living since 1950 certainly warrants our request that the

government give consideration to increasing the pension to at least $50 per month.
I have no recollection of the committee having given any thought to a new feature which has been introduced in this bill, that is, the ceiling of $60 upon taxation by way of increased income tax. The underlying principle of old age pensions is that there is a transfer of payments. They provide the means whereby the wealthy and those classes which are better off can contribute toward the support of those who are less fortunate. One sound principle of any old age pension scheme is that those who contribute by way of taxation should contribute according to their means or ability. I think the $60 limitation upon the amount of income tax to be paid is undemocratic. It just is not sound. The man who has $3,000 of taxable income will pay the same amount in taxes under this scheme as the man in receipt of $100,000 taxable income. We think that is unfair. If the members on the opposite benches care to support that, if they think that that is democratic and fair, that is their privilege. I would not want to go before the people of this country and defend that way of financing old age pensions. If the minister and his colleagues and those who support them want to take that stand, that is their business, but I want to register my protest.
There has been some comment about the earmarking of 2 per cent of the sales tax. I claim that is unfair. I am opposed to a sales tax in any form, whether it be provincial or federal. It is a hidden form of taxation. It bears heaviest on those with the largest families. For that reason I support those who have maintained that this scheme should be financed by all those who contribute on the basis of their ability to pay, and out of other forms of taxation than the sales tax. I know that when we suggest at this time that the old age pension should be raised to $50 a month, when we complain about the effect upon those on war veterans allowance-and I am sorry we cannot discuss that in this debate-when we ask for more expenditure for these things, we are bound to be reminded that there is a rearmament program, that we have to prepare our defences. However, as the last speaker has said, I disagree with the minister when he tells us that these payments have to come out of production, or that they will in any way decrease production. I think the minister's words were that all such social measures take from production.
These are transfer payments. They do not prevent us from producing aeroplanes or machines of war, guns and ammunition. As a matter of fact most of our present social welfare legislation grew out of two wars and
Old Age Security
the depression. Some of it grew out of the depression because people had reached the point where they would no longer tolerate the dire needs which existed among the people. Much of it grew out of the first and second world wars in order to assist in maintaining morale and efficiency both on the firing line and on the production line. Far from reducing our potential capacity for building our defences, such measures as the one now before us assist in strengthening our defences and maintaining our way of life. The editor of the London Economist in a recent issue had this to say on that subject:
The free world cannot go on preserving itself by being strong enough to deter aggression ... At some point in the twentieth century the success of the free world will consist in its ability to advance- which means, in democratic terms, its capacity to offer both for its own people and for the poor communities of Africa and the east, rising standards, both material and moral, that dictatorships cannot provide.
Therefore when some of us advocate that we should raise our sights in the matter of old age pensions and other social security measures, we are not detracting from our defence programs. We are assisting in the defence of our way of life. We are making it possible for our people to realize more fully that that way of life is worth all the effort and all the money we can put into it in order to defend and maintain it.


Mr. H. O. White (Middlesex East):: Mr. Speaker, I do not propose to take very many minutes, but there are two or three observations I want to make. It is needless to repeat what so many have said, that this legislation is welcomed in this country. I would think now that we should plan to bridge the gap between 65 and 70. Labour and industry are planning their retirement programs for age 65. Therefore we should plan to bridge the gap between 65 and 70. I should like to point out to the house that all these things must be paid for out of wealth produced, or they will not bear any relation to the price of the things that the pension, whatever it may be, will buy. I do not know whether or not anyone else has mentioned it, but there is a residence requirement in the bill; and I am wondering about those Canadians employed abroad in the service of the government or in the service of Canadian firms outside of Canada.


Paul Joseph James Martin: No difficulty.


Harry Oliver White: Then they will be covered. Those were the three items I had in mind, and I am glad the minister has cleared up that point.


Mr. Jones:: Mr. Speaker, for one or two minutes-

Old Age Security


Mr. Cruickshank:: When do I get in here?


The Acting Speaker (Mr. Beaudoin):: A few
moments ago the hon. member for Fraser Valley (Mr. Cruickshank) rose at the same time as the hon. member for Middlesex East (Mr. White). If he wants to speak now I will recognize him.


George Alexander Cruickshank: Mr. Speaker, I have to speak a little slower than usual because I want to say what I have to say and still be in order. I do not know whether I will be able to do that. I understand there has been some discussion as to who should get the credit for this magnificent legislation. I would say the main credit belongs to the deputy minister of national health and welfare, who comes from the province of British Columbia. Probably credit is then due to the chairman of the committee, because he had the great advantage of sitting between two British Columbia members who at all times were capable and willing to advise him on any matter on which he was not clear.
The main thing I want to say with respect to the bill is that certain people are not properly looked after. They are penalized so far as the amount of pension they can receive is concerned. Probably I am not allowed to refer to the particular people by name, but the member who sits right in front of me is closely allied with those whom I think are not being justly treated. Parliament itself says that it requires 85 cents worth of food per meal to feed the ordinary individual doing no physical work, and not very much intellectual work either. That is the rate set by parliament. That is the amount that it costs per meal for food. I cannot see how any individual who has given much of his time to his country overseas can live on $40 a month.
You know, Mr. Speaker-and I am keeping in order-to check on what it costs to live in this town of Ottawa the other day I purchased two apples of a kind that sell for $2.40 a bushel wholesale; and they are bought by this government. Look at them. How do you expect an individual to live on a pension of $40 a month?


Mr. Cardiff:: Where did the apples grow?


George Alexander Cruickshank: I was being kind and generous. I did not want to say it, but my friend has asked me, and it is one of the duties we have in this house to reply and not to evade. They are from Ontario.


Lewis Elston Cardiff: Those are not first class.


George Alexander Cruickshank: I bought them in the
parliamentary cafeteria. The government
[Mr. Jones.)
bought them at $2.40 a bushel wholesale; yet we expect these individuals to live on $40 a month.


Lewis Elston Cardiff: They were not buying first
class apples. Do you suggest they were buying culls?


George Alexander Cruickshank: I was being generous
about it. I do not believe in advertising British Columbia apples. If they do not see fit to buy real apples from British Columbia, it is not my fault.


Lewis Elston Cardiff: Even those scrub apples taste better than British Columbia apples, anyway.


George Alexander Cruickshank: Well, I believe that is
true, because it is a matter of taste; if you are used to eating the wormy kind, you begin to like them.
Perhaps I might be permitted to say why I approve of the bill, although there are some features I do not like. I am not a financial expert, but I think the Minister of Finance (Mr. Abbott) endeavoured to bring out a formula which will be accepted throughout Canada, as certainly it will be in my riding. However, we would have preferred a higher corporation tax, and I do not see why that would not be possible. I would ask the minister to read the financial statements of some firms in his own town; and he would find the same thing in my province. One lumber company had a net profit of $13 million in nine months; that is H. R. MacMillan. I understand one mill out in British Columbia has already placed an order for the convertibles used on the royal tour for the use of their office staff. That is the kind of money they are making out there. I think there could have been a higher corporation tax. Why it was not done, I do not know.
The people who, as I see it, are being penalized are those who are in receipt of an allowance from another source. They are going to be penalized now-


An hon. Member:: No.


George Alexander Cruickshank: Yes, they are. If they
get the old age pension, these people-and everyone knows who they are-will be penalized.


Paul Joseph James Martin: I do not like to interrupt the
hon. member, but I suggest he is out of order. As I have taken this position with regard to hon. members opposite, I cannot very well take a different position where he is concerned. The only matter before the house is second reading of the old age security bill, under which no group in this country is being excluded. That is the only matter before us now. I suggest the position taken earlier must be repeated at this time.


An hon. Member:: Consider yourself
spanked.


George Alexander Cruickshank: I am sorry if I was out
of order; I certainly did not intend to be. I just wanted to say what I wanted to say. Apparently I was not in the house when other members were ruled out of order, but I do not want any favours. Therefore I shall confine myself to saying that I am all for the old age pension, and I intend to make a most excellent speech at a later time on behalf of the war veterans.


Owen Lewis Jones: Mr. Speaker, I am sure everyone in Canada welcomes this bill. We in this group are particularly pleased because we feel we have played quite a part through the years in keeping the matter before the house, and eventually coming to the place where the means test is being abolished.
As other members from this group have already dealt with the details, I shall not repeat what they have said. However, I would place on record my experience from many years in municipal life, particularly the period six or seven years ago when the pension stood at from $30 to $40 a month. Eventually in British Columbia it was raised to $50. So the period to which I am referring was the one when a pension of $50 was paid to old age pensioners in British Columbia. Even then we found in the municipality that we had to give social assistance to many of these old people who, in many cases, had to meet high rental costs, and whose cost of living was greater than the $50. Upon investigation we found that they could not manage on that sum.
If we had a problem in British Columbia at that time, where we paid 25 per cent more than many other provinces in Canada, in view of the great increase in the cost of living since that time I feel there should be an immediate increase in the amount of this pension. I shall not suggest a sum, but it should be something more in keeping with the present cost of living.
I am going to make one suggestion which I hope will not be considered out of order. My suggestion deals particularly with single pensioners who are often sick and incapable of taking care of themselves. Presumably they would have the maximum pension; but having to get help to run a house, to pay for rent, light and water, then to go out to restaurants once or twice a day for their meals, as well as pay for washing and buy clothes, I find that these old people have a real problem on their hands.
In the city of Kelowna we tackled the problem some years ago, when we got a
Old Age Security
group together who, with the consent of council, began by purchasing an old house and turning it into an old people's home, expressly for the use of single pensioners who, individually, could not make a go of it on $40 a month. The result was that we gave them small amounts of pocket money; the city put up the balance, and we were able to operate a first class home. It was so encouraging to us, and we were so keen about it, that within the last two years we have built a modern home.
The suggestion I would make is this. We know that $40 a month is totally inadequate for the single person who must get help to run his home. When a municipality is willing to group them and build a home so that the total cost can be shared by the municipality, then I suggest the government should place that home on the same basis as a hospital, so far as support is concerned, by giving a grant of $1,500 for each bed. This would go toward supplementing the inadequate pension. I feel the government would be justified in making such a grant. It would be justified on moral as well as sound business grounds, because I feel the minister must realize the sum is inadequate. If in this way the minister would assist the municipalities to help out the people for whom he is primarily responsible, namely the old age pensioners, it would be helpful.
Many of these people are too ill to do anything for themselves. With this little money, after paying the rent, they would find it difficult to engage nursing or housekeeping help. I believe the example set in Kelowna and one or two other towns in British Columbia has brought a new feeling of responsibility on the part of the municipalities toward the old people. The municipalities to which I have referred have shown a willingness to play their part by building these homes. May I point out to the minister that caring for these old people would relieve the burden of the hospitals. Many of them are now in hospitals, taking up valuable beds for which the government is paying a grant of from $1,000 to $1,500 each. If the government would take the position that it would build homes to relieve the hospitals and take care of the government's responsibility for old age pensioners without enough pension, and would offer to make a grant, it would be helpful. I suggest that it should be $1,500 as in the case of hospitals.
If that were announced I believe every municipality in British Columbia would follow the lead that has already been given in the municipalities I have mentioned.


Mr. Angus Maclnnis (Vancouver East):: Mr. Speaker, there is no real reason why I should

Old Age Security
speak on this measure. There will be nothing new in what I have to say, because I think an excellent job has been done by several of the speakers who took part in the debate. But down during the years I have taken a very active part in urging that social legislation be passed, so I do not want to let this opportunity pass without saying something.
Like aE hon. members who have preceded me in the debate I, too, welcome this measure. I am sure that it will be a godsend to a large number of people who are now living on small incomes. I have just one example in mind which I shall mention. I am sure the difference this pension wEl make to that person will be the difference between comfort and living in continual worry. I know of an old lady who was left a widow about ten years ago, with an annuity of $100 per month. There may have been a little other income, but that was really her living income. Today, because of the rise in living costs, this $100 per month is worth about $50. This $40 now will mean to that woman the difference between Eving in continual worry and living in comparative comfort. I am sure there are hundreds of those cases, perhaps thousands.
There has not been any criticism of the principle of the bill, but there has been some criticism of the amount of the pension and the way it is being financed. For many years I have advocated that our social security should be on a contributory basis, but not an actuarial insurance basis.
I believe the government is agreed that the insurance principle is not workable. This measure comes very close to being on an insurance basis. I must express my criticism, as others have done, at the limitation of $60 which any person can contribute in income tax. It seems to me that a person to whom this country has been so good as to provide a taxable income of over $3,000 per year should be not only willing, but glad, to pay an additional share for those less fortunate than he. Ultimately, if the taxes already provided do not secure sufficient revenue, the deficit will have to be paid by those who are in a position to pay it. If everyone were in a position to put in as much as they take out we would not need a scheme of this kind, because everyone would then be able to provide for his own old age. I believe that those who have large incomes, as I said before, should be willing to pay more than $60, and should be prepared to pay 2 per cent of the whole of their taxable income as a thank-offering for what Canada has done for them.
No matter how much anyone takes out of the pool of production, his achievement is not just an individual effort. A few weeks ago I read in the magazine section of a Vancouver

paper of a person whose annual income was $500,000. I am not mentioning any names. He is, of course, taxed to a considerable extent, but it was said that his income was about $200,000 after taxes. I do not know whether or not that is correct, but whatever the amount it would be a very good income. Now that person did not, by his own efforts, create that income. He has people working for him. Over and above what he pays those people who work for him, each of them out of his labour contributes to that income; so it comes out of the social effort of the people of the country. Because it comes from the social effort of the people of the country, then in providing for social legislation we should tax away a fair share of it for that purpose. I hope the last word has not been said as to how this old age security will be financed.
There has been some criticism of the difficulty some people are meeting in proving age. It has been said that the department is too strict in that regard. I am not going to criticize the minister for taking every means to get proof of age, because I can see what would happen if it should come to light that thirty, forty or one hundred people who had not yet reached the age of 70 were receiving the universal old age pension. The minister would be criticized, and I suppose justly. But I do say that whenever an applicant has furnished all the information he has, the pensions board should either accept it or prove that it is not correct. In the final analysis, if there is doubt the pensions board, after every effort has been made to get proof of age, should give the benefit of the doubt to the applicant. That is all I wish to say about that.


Paul Joseph James Martin: What my hon. friend has said is exactly what we are seeking to do. I am glad he has emphasized it.


Angus MacInnis: I am glad that for this once I can agree with the minister. Under our parliamentary procedure there is no last word on any measure passed by this parliament. There is always the pressure that can be brought to bear to meet needs, and I am satisfied that there is a great need yet which this measure does not meet. I am satisfied that pressure will be exerted, and the government will have to take notice of it. There is also the fact that in this country, as in every democratic country, periodic elections are held. Governments have to appeal to the country. It is generally when governments have to appeal to the country that people come into their own. Things that were absolutely impossible the year before an election become not only possible but an absolute necessity in an election year. I listened to a broadcast last night. May I say

that I hope this is not out of order; I am not sure but that the broadcast was. As I say, I listened to a broadcast speech by one of the party leaders in the election campaign now going on in this province.


Paul Joseph James Martin: We would have to know who the leader was before we could say whether it was in order or not.


Angus MacInnis: As a matter of fact it took me some little time to ascertain who the leader was, because the policies he was advocating were not the policies his party is advocating in this house but rather the policies the C.C.F. have been advocating. For example, he was advocating the revocable check-off; but I understand he voted against that when he had the opportunity to support it not so long ago. He was advocating subsidies. The hon. member for Vancouver South (Mr. Laing) told us yesterday that subsidies were out because they would involve rationing. I can see that if the party which the leader referred to happens to be elected on November 22 the people of Ontario are in for a hard time because milk wall be rationed.


Mr. Laing:: Oh, tell us who he is.


Angus MacInnis: I believe that even the hon. member for Vancouver South could guess by now, so I will just leave it at that.
I am glad we are living in this kind of world, in which parties and governments must go to the country every once in a while. Because of that, I am not going to indulge in any further criticism of this bill. We shall have criticism to offer in other places besides the House of Commons.


Mr. J. H. Rooney (St. Paul's):: Mr. Speaker, I must congratulate the Minister of National Health and Welfare (Mr. Martin) on this bill. For many years I have looked forward to the passage of a bill similar to this, especially one without a means test. I believe, however, that this is just a starter in connection with what this government will do.
On March 30, 1950, in this house I asked for a bill to provide for $60 at the age of 60 years. I hope some day to see the fulfilment of my request. It might be said that it is an impossibility to pay that amount, but I believe we have confidence in Canada and feel that nothing is impossible today for the citizens of this great and rich country of ours.
I do not like the phrase that is so often used, namely "old age pension" or "old age security". At this time I look on assistance to Canada's senior citizens not so much as
Old Age Security
a welfare measure as a measure of national defence. Our Prime Minister (Mr. St. Laurent) is frantically working, first for peace and, second, for national defence. He is ably assisted by our Minister of Defence Production (Mr. Howe)-whom we know, through our experience of his work in the last war, is doing a magnificent job-and by the Minister of National Defence (Mr. Claxton), who in my opinion is the best minister of defence Canada has ever had. By national defence we mean peace at home as well as peace abroad: peace within and without. We cannot have peace at home when we are tormented by poverty iand privation, whether because of old age or chronic illness. As a measure of national defence I plead for adequate pensions without a means test, not only for the aged but also for chronic invalids who are unable to help themselves, so that we may have peace at home. Let us remember that it is the descendants of our senior citizens on whom we depend to defend Canada both at home and abroad.
I have taken the liberty of reading these few passages, Mr. Speaker, because they are from the last letter I received from my sister, Miss Loretto Plunkett Rooney, who died a few days ago. She always believed that we should look after our senior citizens, and not have it appear as though we were doing any charitable act. I did not intend to speak during this session, but I felt that I had a duty to my people and to the memory of my sister. If she had been alive she would have been here today, sitting in the gallery.
In closing, I want to congratulate this country on having as Minister of National Health and Welfare, Hon. Paul Martin. He has a gigantic task before him. I speak kindly of him not only for that reason but for the kindness shown not only to me but to many others who have been attacked by illness. He does not just do a job on paper; he does the same job every day from the heart.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Short title.
Stanley Howard Knowles: Mr. Chairman, could we perhaps call it 6.30 and proceed with the bill at eight o'clock?


Jean Lesage: Oh, no; we have ten minutes.


Paul Joseph James Martin: Let us make some progress.


Jean Lesage: Yes; come on.


Stanley Howard Knowles: Call it 6.30, Mr. Chairman.

Old Age Security


Paul Joseph James Martin: All right; let us call it 6.30. I would ask the hon. member not to forget that I agreed to -this. When I ask him to do something, I hope he will do it.
At 6.30 pan. the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Mr. Beyerstein:: I should like to say a few words on section 1 of this bill. The hon. member for Red Deer has already expressed the views of this group concerning the contents of the bill; therefore it will not be necessary for me to do other than deal briefly with it at this time. This legislation is a step in the right direction. One feature of it I especially like, namely the feature of establishing pensions as of right for our aged people. In future our old age pensioners will feel that they have earned their pension. They will feel they are receiving a pension because they have contributed to the fund from which that pension is drawn. In the past there has been much criticism from many groups, which had a tendency to make the old age pensioner feel that he was receiving public charity, or that he was a ward of the government. Under this new bill that will be eliminated, and I am sure it will tend to improve the morale of our old age pensioners.
I should like to mention one other point, namely the method of financing the proposed old age pension scheme. I am not opposed to a contributory method, but I believe the methods outlined in the present bill could be improved. For example, I am opposed to the 2 per cent sales tax mentioned in the legislation. It has been pointed out to the government on several occasions that the sales tax is a vicious tax, a tax which has a tendency to increase our ever-mounting spiral of prices. Not only that, it is a tax which is levied against people in the lower income brackets who are least able to pay. Therefore I oppose the 2 per cent sales tax as outlined in the bill. I am also opposed to the limit which is placed upon that portion of the tax which is to be collected in addition to our regular income tax. I would suggest that this limit should be removed entirely and the 2 per cent tax collected on the entire amount of the taxable income. If we did that it would be possible to eliminate the 2 per cent sales tax and thereby lessen the burden on those who can least afford to pay the tax.
The ideal method of financing this scheme I believe would be to pay the universal

pension out of general revenue and adopt a method whereby it could be recovered from those above a fair income tax level, who are not in need of a pension. I believe that would be the ideal way of financing the scheme.
There is another point that I should like to deal with briefly, namely the question of proof of age. During the past summer I had the occasion to help dozens of my constituents make out applications for the old age pension. In nearly every instance the application was returned by the department for further proof of age. In each case the applicant did submit proof of age which, in my opinion, should have been accepted. However, the department seemed to think it was insufficient, and asked for additional proof of age. I believe something could be done to lessen this difficulty so far as the elderly citizens are concerned. In many instances the only proof an older person has is the family bible. In most cases it is very cumbersome to transport the bible to the proper authorities. Often it is damaged in transit. Not only that; there is also danger of it being lost. I suggest it should be possible so to arrange matters that the old citizen would be able to take his bible to a local judge, or to some competent authority, and have an affidavit prepared which could be submitted to the department as proof of age so far as that person is concerned.
As I said before, I believe that this bill is a step in the right direction. I think it will be a benefit so far as the universal pension feature is concerned. As we come to the various clauses dealing with the points I have mentioned I shall strongly urge the government to consider the recommendations I have made.


Jean Lesage: The hon. member for Camrose just made an affirmation that I can hardly let pass without saying a word. He just said that if there was no ceiling of $60 on the 2 per cent income tax levy we would not need to collect the revenue from the 2 per cent sales tax. May I point out to him that according to the evidence given before the committee, of which he was a member, a 1 per cent income tax levy without ceiling with an exemption of $500 and with perfect collection would yield $74 million. With a ceiling of $50 it would yield $67 million. That is a difference of around 8 or 9 per cent in the revenue of the income tax. It is calculated that the 2 per cent levy would yield about $60 million. That is to say, if there were no maximum we would expect to have a revenue of about $67 million, a difference of $7 million. The 2 per cent sales tax will yield $145 million. Therefore it would take a much larger percentage of income tax to yield the same $145 million. It would be

unfair to collect so much on a direct basis, if we keep the exemptions of $1,000 or $2,000 according to marital status.
There has been considerable criticism of the 2 per cent sales tax levy with which I cannot agree. After all the pension payments are universal, and I believe the contributions should be as universal as possible. It should be remembered that the committee was unanimous on that principle. It has been said that the sales tax will not have the same direct relationship to the benefits to be paid as would a direct contribution. That might be true in part, but we should not forget that a special fund is to be set up into which these moneys will be paid. The taxpayers of Canada will be in a position every year to know how much it will take in taxation to provide an increase in the benefits. That is important. As far as this sales tax is concerned, I should like to place on the record an excerpt from the testimony given before the committee by Mr. W. M. Anderson, general manager of the North American Life Assurance Company, who said:
Now, as to the form of financing, I have already said that I think the financing should be of such a character that virtually everyone makes some contribution of his own. The universal character of the financing seems to me to be important as a thing that parallels the universal benefit. Secondly, the financing should be simple. I shudder to think of some of the complications that arise from time to time iri financing under such a scheme as the American old age and survivors insurance plan. Third, the financing system should be equitable in the sense that it must take cognizance of the ability to pay as between people in various economic positions. And, fourth, the financing system must be practical in the sense that it must not involve costly and difficult administration, nor should it be of such a character that it might run the risk of substantial collection losses.
And again:
The four points were that the financing system should be universal, simple, equitable and practical.
I believe every hon. member will agree with those four principles. I sincerely believe that the method of financing submitted by the Minister of Finance the other day follows those four principles in being universal, simple, equitable and practical. It is universal because it will touch everybody. Everybody will be in position to say, "I have paid for my pension; I have a right to it".


Major James William Coldwell: Wherever he lives.


Jean Lesage: In Canada.


Major James William Coldwell: No, wherever he lives. If
he has paid for it, he has a right to it wherever he may reside.


Jean Lesage: There might be some objection to that. I do not intend to discuss that now as it might affect some other aspects of our policy. As I said, everybody will be
Old Age Security
paying for this universal pension. That is important, because they will receive this pension as a matter of right. With direct taxation only there would be some people who would not pay because of the exemptions allowed. But with this sales tax levy even the poorest person will pay his small share toward his pension, and I believe that is a satisfactory state of affairs.
Is it simple? Surely the method of financing announced by the minister, that is the 2 per cent and 2 per cent, is simple enough.
Is it equitable? It is equitable because everybody will pay according to his capacity.


Joseph William Noseworthy: Those having a taxable
income of $3,000 will pay as much as those with $100,000.


Jean Lesage: The only criticism is as to this ceiling of $60 on the amount paid in income tax, and this would affect those having more than $3,000 taxable income. Let us not forget that a young man of twenty years of age who wants a pension of $40 per month to begin at age 70 would have to pay an insurance company $2.25 per month. If he is 30 years of age, he would have to pay $3.52. It is only when he reaches the age of 37 or 38 years that he has to pay $5 per month, which he would have to pay under the direct contribution if he had a salary of $4,000, as a single man, or $5,000 as a married man without children. Would it be fair to ask such a man to pay more in direct contribution than he would have to pay an insurance company? In addition to that he will contribute through the sales tax or spending tax, and will therefore pay much more than his share.
Even though the absence of a ceiling might be considered equitable from the sociological point of view, we must avoid as much as possible any feeling of injustice. We would create a feeling of injustice if we asked in the form of direct contributions much more than it would cost a man to obtain the same benefits from an insurance company. After all, these contributions are being earmarked for a definite purpose. Of course, it must be admitted that the same principles do not apply in the case of taxation to obtain the general revenues. In that case there is no limit; there are many people in Canada who know there is no limit, and they often complain about it. In this particular case it is earmarked for a special purpose. I repeat, if we go too far we will create a feeling of injustice which is not a good thing for Canada.
Now I come again to my answer to the hon. member for Camrose. If the absence of a ceiling meant a great difference in revenue it would be important, but if it only means

Old Age Security
a difference in revenue of $7 million on the total that we need of over $300 million to enable us to avoid that feeling of injustice, then I say that we must do it. I appeal to the members of the special committee. Maybe there were times when we talked about a ceiling of $25 or $50, but apart from the hon. member for Winnipeg North Centre I did not hear much said against the principle of establishing a ceiling on contributions. Maybe there were some questions about the amount of the ceiling, but nothing was said against the principle except by the hon. member for Winnipeg North Centre.


Stanley Howard Knowles: And the hon. member for Spadina.


Jean Lesage: He did not say anything.


Major James William Coldwell: Oh, yes.


Jean Lesage: He did not say he was against the principle of a ceiling. I have read the quotation. I had the book in front of me when the hon. member for Winnipeg North Centre read it this afternoon.


Stanley Howard Knowles: He went even further. He wanted graduated instead of proportional taxation.


Jean Lesage: At that time there was no question in the committee of a sales tax. We were talking about direct taxation alone. Let us never forget, however, that the sales tax is a graduated tax. It is a spending tax. The more money you have the more you spend and the more you contribute to the old age pension fund, and that is very important.


Mr. Knight:: What percentage of your income?


Jean Lesage: It all depends. Expenditures subject to sales tax might go as high as 40 or 50 per cent when you get to the higher brackets of income.


Some hon. Members:: No, the other way.


Major James William Coldwell: The other way around.


Gordon Knapman Fraser: It hits the little fellow.


Mr. Quelch:: The lesser the income the bigger the percentage of tax.


Gordon Knapman Fraser: It hits the little fellow the hardest. Sure it does.


Jean Lesage: Our sales tax does not affect the essentials of life.


Gordon Knapman Fraser: Oh, yes.


Jean Lesage: It does not affect food; it does not affect shelter.


An hon. Member:: What about margarine?


Jean Lesage: It is too bad that my friend the member for Fraser Valley is not here. He could answer you about margarine. It does not affect the essentials of life.


Major James William Coldwell: What about clothing?


Jean Lesage: Here is what Mr. Anderson said in his testimony at page 893 of the proceedings of the old age security committee:
On the other hand it must also be observed that a tax on spending does not tax savings and some of my economist friends tell me that the present sales tax, for example, in the broad area of expenditure upon which it falls, has about the same impact on different families in the community as would a proportionate tax upon all personal income.
The present sales tax is proportionate to income, and it serves the same purpose as the income tax so far as a proportionate tax is concerned. If we want universality of contribution then I say the only means to achieve it under our present system is through the sales tax. There is no other means because you cannot have universal payment of income tax, and the hon. member for Winnipeg North Centre knows that.


Stanley Howard Knowles: In other words you reduce the exemption levels without saying so.


An hon. Member:: Don't pay any attention to him.


Jean Lesage: The hon. member for Winnipeg North Centre agreed in the committee time and again that the benefits should be universal and that the contributions should be as universal as possible but graduated, in other words according to capacity to pay. I say that with the present system that is exactly what we have except for the ceiling of $60, which I have explained is necessary to avoid any feeling of injustice over something which is not really worth mentioning because it is only 2 or 3 per cent of the revenue we need for the payment of these pensions.
I have heard some criticism, and I have read criticisms in the newspapers, about the fact that these pensions were going to be paid to rich people. I have read attacks on the universality of the pension, something which has been praised by all members of the house. The hon. member for Camrose did not say so in so many words, but he criticized the fact that the richer people will receive this pension. That comes to the same thing as the attack which I saw in the Gazette and those which I have heard in certain quarters. Some people imagine that a great proportion of our people over 70 years of age are rich. May I remind the house that we have 700,000 people 70 years of age and over. Of this 700,000 practically half were receiving pensions under a means test which has been characterized as being too narrow.

It has been said again and again, even by the people who criticize universality, even by the Gazette, that the way to cure this situation is to raise the permissible income level. I do not know to what extent they want permissible income levels raised but may I say that of the 700,000 people 70 years of age and over there were only 50,000 who in 1949 required the special exemption of $500 for people 65 years of age and over under the Income Tax Act. That means that only 7 per cent of the population of that age group had incomes which were over the income tax exemption level. Who are these 7 per cent? They are the people who will be contributing directly and who have been contributing directly. They are the people who will continue to contribute to the sales tax and who have been contributing to the sales tax and the income tax.
After all and generally speaking, we may divide in two broad categories those who will receive the pension now, those who would have continued to receive it under a means test system such as we have now and those who would not receive it. Generally speaking it may be said that in the first group you will find people who would not have contributed anything directly or very much indirectly toward their pensions. In the second group you will find those who after reaching 70 still have incomes over the present permissible income level. You will agree that it may be said that, in general those people in the second category will have contributed the most through direct and indirect taxation toward their pensions. I say it would be an injustice to deprive these people of a pension for which they will have paid through earmarked taxes.


Mr, Noseworthy:: There are worse injustices than that to look after first.


Jean Lesage: When we have a chance to prevent ourselves from committing a further injustice, should we not do it? I believe we should; and I am surprised that the hon. member with all his talk about justice and equality would not agree with me. I have heard him so many times speak of his own principles of sociology that I am surprised that he does not follow me this time, because I believe that I am speaking of justice with a capital "J" when I say that.


Mr. Sinnott:: You need not be surprised at what he says.


Jean Lesage: I see I have done the thing I had promised myself not to do, and that was to get into the heat of the debate. However, that is my nature. Before I close may I thank sincerely all the members who have been
Old Age Security
good enough to pay me compliments for my work as chairman of the committee. I would hope that all the chairmen of committees of the House of Commons and of the other place would always have in future years members as co-operative and as willing to do justice to everybody as were the members who sat with me on the committee on old age security.


Mr. Ferrie:: Mr. Chairman, I was on the
committee, and as a member of it I should like to make a few observations. The hon. member who has just spoken, and who was chairman of the committee, did a wonderful job. He gave everyone a chance, and we always came away from the committee with the idea that everyone was well satisfied. I am sure the committee, when it completed its deliberations, left the impression not only in the House of Commons but throughout Canada that we were unanimous, and that we were satisfied with the principle of the whole thing.
But now we hear a lot of criticism. The sales tax was discussed in that committee, and it was agreed among ourselves that the sales tax was a right and proper procedure. No one challenged that. We go out even to the good old province of Saskatchewan, where it would seem there are some men who just do not agree with those who are here in Ottawa. The minister of public health in Saskatchewan, Mr. Bentley, told delegates at the Saskatchewan hospital convention that the sales tax is about the only way the provincial government can tax people according to their ability to pay. He said that, in that way, those who have the most money to spend are taxed the heaviest.
Now we see them coming here to Ottawa and kicking against the very thing their colleagues in Saskatchewan have accepted as the right and proper thing to do; that is, according to what they say out there. I would ask those who are on the same side as the government in Saskatchewan, those who are doing a lot of talking about the means test, to say if they are going to add to the pension, in the same way it has been added to in British Columbia and Alberta. Are they going to pay $10, $20 or $30 extra to the old age pensioners in Saskatchewan, or are they going to do the same as they did with mothers' allowances; are they going to put on a means test? They put a means test on the poor mothers' allowances, and you cannot get away from that.


An hon. Member:: Shame.


Gladstone Mansfield Ferrie: Now they come down here and ask us to cut off the sales tax and get the money from the people who have the ability to pay. In connection with the sales tax,

Old Age Security
people do not have to buy, if they do not want to. It does not interfere with the purchase of food. The little people are not going to have all that to pay. It will apply to those who are buying those commodities that are really and truly luxuries. People could get along without those things if they did not want -to buy. I say that to earmark the 2 per cent is a proper procedure, and I hope it will be carried through.


Paul Joseph James Martin: Mr. Chairman, I rise for a moment to suggest, with great respect, that perhaps we might follow a more orderly procedure in connection with the bill. I understand the rule as to the confining of debate is not clear, in so far as the practice is concerned in connection with the discussion of the first section. I -would suggest to the committee that on second reading there was an opportunity-one which indeed was taken this afternoon-to discuss in principle the subject matter of the bill. This bill is twofold in character. On one branch are those matters of direct concern to the Department of National Health and Welfare, and on the other branch are fiscal proposals of interest to the Department of Finance.
So that we may have orderly procedure I would suggest that we confine our general statements on fiscal matters to section 10 of the bill, thus enabling the minister responsible for that part of the measure to take part in the discussion. On the other hand I would take responsibility for the discussion on all other sections, beginning with the one now under discussion, and including section 12. In this way discussion would be in no way foreclosed. No one would lose the opportunity to discuss fiscal matters. I suggest to the committee now that we consider passage of the sections, unless as they are called questions arise which relate specifically to those sections. We could proceed with the sections seriatim, dealing with fiscal proposals under section 10 in a general way.
Mr. Cold well: What the minister has said might have been better said when his own friends, on his side of the house, were discussing financial matters in connection with the bill. I suggest that, having allowed the discussion to go on in the manner it has from that side of the house, no attempt should be made at this stage to stop anyone on this side from making comments on the points that have been raised by hon. members supporting the minister.
I rise merely to say that as a rule I have refrained from discussing provincial matters in this federal parliament. This is not the arena in which those matters should be discussed. But I am going to say, since the matter has been raised, that as I said the

other afternoon when the bill was introduced there might be circumstances under which a sales tax might be arguable. I think that does apply to the provinces, but not to the federal parliament. In this federal parliament we are not limited in what we may do in regard to the raising of money by taxation. The provinces are. From time to time we have encroached upon provincial powers of taxation to the extent that Nova Scotia, Saskatchewan, British Columbia and other provinces are considering putting into effect sales taxes for specific purposes, and social security in particular. But that does not by any means support the view that the sales tax should be put on for this purpose by the federal parliament. I want to say to my hon. friend that the sales tax is an inequitable tax. It does tax those who have to buy the ordinary necessities of life, like clothing for their children, and therefore it does bear more heavily on those with small incomes .than those with large incomes.
I listened very carefully to the speech by the chairman of the old age security committee in which he defended the ceiling on the income tax levy. But I noticed this. He -quoted with a good deal of approval statements made before the committee by a representative of the North American Life Assurance Company. There were several points, one of them being that the universal contributions should be equitable. He then went on to define what equitable meant, and said that it should be according to ability to pay. Here we find- the government has introduced a bill along lines not suggested by the committee, and only those in the middle income group pay the 2 per cent levy. Where there is taxable income of $3,000 the taxpayer will pay the $60. If there is taxable income above that, then the 2 per cent levy is not made on the amount of taxable income above $3,000. Yet the hon. member made a point of the fact that it must be equitable, and that to be equitable it should be based on ability to pay. We relieve those who can well afford to pay from paying more than $60. I say that is inequitable, particularly if you put on a sales tax.
The second point I want to make is that the hon. member based his argument largely on an annuity and the amount of contribution that is made. If that is the case I want to repeat what I said the other afternoon, that clause 5 of this bill should be amended or deleted, because it limits payment of the pension to those people who remain in Canada and are not absent for more than three months. If this scheme is formulated on any basis of equity, and on an annuity basis-and the hon. gentleman showed that a young man of twenty would, in his lifetime, pay for that

Old Age Security
annuity-then we have no right to deny him that annuity if he chooses to reside on the Pacific coast of the United States, or if he chooses to go with a daughter or son who may have taken up residence in Great Britain or some other country. That is an inequitable part of this bill, and if we are going to deal with this matter on the basis of equity then that particular clause should come out or be substantially amended.
I want to say that, while an argument may be made for a province, with its limited field of taxation, imposing a sales tax for social security as has been done in British Columbia, in Saskatchewan, and as I have no doubt may be done in other provinces, I think no such case can be made for this federal parliament, where we have the widest possible powers of taxation. Consequently I want to repeat that if we are going to formulate this on a basis of equity, and on a basis of ability to pay, then we should remove that ceiling of $60 so those who can afford to do so will help pay for those who cannot afford to make a contribution. I found rather staggering the statement made tonight, that more than 40 per cent of all people who attain the age of 70 in this country are dependent on relatives or friends or are in receipt of some form of charitable contribution. That, Mr. Speaker, is an indictment of the economic system under which we are living today. I say if we are going to have equity, let us have equity; if we are going to base this on ability to pay, let us have it on ability to pay. Let there be no ceiling. Let it go right to the very top, so that those who have much may contribute for those who have very little. Surely that is the basis of a democratic, modern and, if I may use the term, Christian society, that we should help those who cannot help themselves.
I want to make this point as clearly as I can. I hope that as the committee goes through this bill section by section we shall so amend the bill that we may remove these objectionable features, and make this an excellent measure. It is a measure for which we have long sought, a measure we have long advocated, old age pensions without a means test. I do not like to see a means test in any form in this type of legislation. Step by step, apparently, we are removing this means test. In those respects I have mentioned I do not think this bill meets the needs of the times or carries out the principles the committee had in mind when it reported to this house.


James Sinclair: I should like to observe the rules of the house and not talk about the financial implications of the tax features of this bill. I think the proper time for that
will be when section 10 is reached and the Minister of Finance '(Mr. Abbott) is here. I should like to promise the hon. member for Winnipeg North Centre and the hon. member for Vancouver East, both of whom are rather hazy about our tax system, that when we reach section 10 I shall come forward and use the figures they quoted this afternoon, to show the real impact of this system of payment.
The hon. member for Winnipeg North Centre, for example, quoted the difference between a married couple earning $6,000 and a man earning $50,000. The hon. member for Vancouver East quoted the case of that happy man out in Vancouver who has an income of $500,000 and he said probably pays about $200,000 or $300,000 in income tax. To illustrate how hazy the hon. member is on taxation, may I say that man pays $434,000 tax if it is earned income. If it is income entirely derived from dividends and interest, he pays another $20,000 surtax. Therefore the idea of such a man escaping scot-free so far as paying into the national treasury for social security is concerned is very wrong. To have the discussion of the present items branch off into a financial debate, especially when some of the members are apparently so hazy about how our income tax, corporate tax and excise tax works, does not serve much purpose. I shall promise the hon. members that the Minister of Finance or I will avail ourselves of the proper opportunity to answer these figures on section 10.
In closing I should like to say that the leader of the C.C.F., in his very plausible way, did not answer the hon. member for Mackenzie. The provincial minister of health in Saskatchewan, who I believe is Mr. Tom Bentley and who apparently did get some good financial schooling when he was a member here, understands that the sales tax is progressive in that the more a man has the more he spends and therefore the more sales tax he contributes. That is the point Mr. Bentley was making in the statement quoted by the hon. member for Mackenzie. He was not making the point which the hon. member for Rose-town-Biggar said, that today the provinces are pretty well restricted to levying direct sales taxes. The provinces are still in effect receiving personal income taxes and corporation taxes from residents of their provinces, because we collect them for the provinces under a rental agreement, and those funds are turned over to them. They could easily, if they so chose, take the money from these rental payments and regard them as income tax contributions from their provincial residents.

Old Age Security
However, again I do not want to get into the actual details of the two examples which were offered this afternoon by the hon. member for Winnipeg North Centre and the hon, member for Vancouver East. Tomorrow I shall bring forward the actual contributions to this old age security plan paid by those three groups, the married couple who are both working and earning $6,000, the man who is earning $50,000, and the man-I do not think he will be a constituent of the hon. member for Vancouver East-who is supposed to have this income of $500,000 per year.


Angus MacInnis: The people of Vancouver East produced it, but that man gets it.


Stanley Howard Knowles: I agree with the Minister of National Health and Welfare and the hon. member for Coast-Capilano in the suggestion that the main body of this financial discussion could be reserved until we come to section 10. In fact, it was not my intention, until the hon. member for Coast-Capilano got up this last time, even to rise to say that at this time, but merely to wait until we reached section 10; and I will do so, so far as most of what I want to say on this matter is concerned.
However, I think I should be permitted to say just a brief word in reply to what has been said by the hon. member for Coast-Capilano and the hon. member for Mont-magny-L'Islet. The hon. member for Coast-Capilano has indicated that the wealthy person pays a certain large amount in income tax. He indicated the amount of income tax that would be paid by the wealthy person referred to by the hon. member for Vancouver East. We recognize that fact. We are not hazy on that point at all. Our point is that that man may be paying several hundred thousand dollars of normal income tax to the general revenues of the country, but he will pay only $60 additional for old age security as compared with the same $60 additional that the man with the $5,000 income will pay on his $3,000 taxable income. I suggest that no amount of trying to tell us that we are hazy, and no amount of telling us the large amount of normal income tax that these wealthy people pay gets away from the fact that, as to old age security tax, the additional amount is to be only $60 in any case, no matter how great a man's income may be.
The other point I wish to make is this, in reply to something that was said by the hon. member for Montmagny-L'Islet. I want to repeat the views that many of us have expressed as to the excellent chairmanship he gave to the committee last year. I have reason to be particularly conscious of the way in which he permitted all points of view to

be expressed. Part of the reason that the committee did a good job-and it did a good job-was owing to the excellent chairmanship that we had. I may say that he made a better chairman than he does a member trying to argue about the things that are at stake here.
A while ago I noted that he was solicitous for what he called equity; he said he wanted to see that this pension was established on the basis of equity, and that he did not want to collect more than $60 from the wealthy people who would not get back in terms of an annuity or in terms of the old age pension any more than that much money would buy. In other words he wants justice for the wealthy person during the years he is earning the income or getting his money and paying taxes on it. If he had stopped there, it might have been a plausible argument; but then he turns around and talks about the millionaire who has retired, and he wants him to get the full pension too. I agree that he should get it. I want a universal plan, with no means test. I have been fighting this means test for years, and I am not going to waver on that point now. But the former chairman of the committee suggests that in equity, because that millionaire has contributed, he should get the pension. Does the hon. member realize what he is doing? He is asking that wealthy persons be protected at both ends. He is trying to protect them from paying a proportional tax, let alone a graduated tax, on all their income, when they are earning that income and paying tax on it; then he wants to protect them against those who would deny them the pension when they retire. We feel that some of that same solicitude should be expressed for other sections of the community and that this solicitude for equality and fair play calls for the recognition of this plan as aiming at some redistribution of wealth which you do not get when you revert to the insurance or benefit principle.


Jean Lesage: I am sorry to say that the hon. member for Winnipeg North Centre is under a false impression. I am not trying to protect the wealthy at both ends, and he knows it.


Stanley Howard Knowles: It sounded that way.


Jean Lesage: No. I said that the young man of 20 or 30 years of age who would contribute more in direct income tax, in view of his pension than he would have to pay if he bought an annuity, would have a feeling of injustice; and that it would be bad if we had a large proportion of our young men who had a feeling of injustice.


Stanley Howard Knowles: Are they millionaires at that age?


Jean Lesage: I never said that it would not be equitable if we had no ceiling. I said we would notice a general feeling of injustice. That was my first argument. As to the other matter, I said the wealthy people over 70 would reimburse, through various kinds of taxes, what they will receive in whole or in part, because of our general system of taxation.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Payment of pension.
Mr. McLure:: With reference to proof of
age, about which some remarks have been made, there is one matter I wish to mention.


Stanley Howard Knowles: What section are we on?


Paul Joseph James Martin: Section 3.


Winfield Chester Scott McLure: We are on any one you may agree that we are on. Any section from 1 to 10 has been in the discussion so far. What I wanted to mention was this. The greatest sting in the tail of this bill is that the aged people are going to have great difficulty with regard to proof of age.


Paul Joseph James Martin: May I just point out that section 3 (1) deals with the question of date and the amount, and suggest that at this stage we should confine ourselves to those two aspects of the section. We will come to the matter of proof of age later.


Winfield Chester Scott McLure: I just wanted to refer to this matter, in view of the fact that two or three other hon. members have already referred to it this evening.


Paul Joseph James Martin: There will be an opportunity to refer to it later on. My hon. friend may discuss this matter under section 3 (1) (a). '


Winfield Chester Scott McLure: It will be too late then. Just let me have my little say now. What I want to say is this. The proposal has been made that, as to proof of age, the matter should be left to a judge or a lawyer, and that if they see a bible or some book containing proof of age that should be taken. What I should like to have added in there is that any clergyman knowing the situation, who can inspect the family bible, may give a certificate and have that certificate taken. I know of two different cases where men applied for the pension and had difficulty about proof of age. One of them was in Winnipeg South Centre three or four years ago. The man could not get proof of age. I happened to know this individual. I knew his parents and grandparents. Some of them were still living. The proof I submitted was this. The clergyman went and saw the family bible, and made a statement to the effect that he saw that this man's birth 94699-41
Old Age Security
was registered in that bible. The government of Manitoba accepted that statement and the man got his pension.
No doubt all hon. members, before coming here this fall, have had to deal with many applications. I know I have made out scores of applications for these old age pensioners. The difficulty they had was in getting proof of age. I just want to cite one instance. A retired farmer came into my office; he was 92 years young. Seventeen or eighteen years ago his life companion up to that time passed to the great beyond. His children were living in various parts of the United States. He decided he would sell his little farm and see if he could have enough to live on for the rest of his days. He had figured that it would cost him $500 a year; and for the last ten or twelve years he has been able to get along. But now, with the rising cost of living, this poor soul finds himself in the position that it will take $1,000 where it formerly took only $500. And as he said himself, even then he had to do without a wee drop of doch-an-dorris. When he finished making out his papers I asked him what proof of age he had. He hesitated for a minute and then said: "Well, my mother died when I was a mere child, and I was brought up by an aged grandmother. I have no proof now that my grandmother is in heaven." This man is 92 years of age; yet when his application goes in, because he is a rather smart looking fellow, they will decline to accept it unless he can prove that he is 92.


Paul Joseph James Martin: This afternoon the hon. member for Winnipeg North Centre repeated a good bit-I am not complaining about that- of what he had already said, and he was followed by some other hon. members who complained about the amount of the pension provided for in the bill. I have refrained thus far from taking any part in the debate because I thought it would be desirable to explain the bill on the various sections. But in view of what was said I believe I owe it to the house to put on record what was in the minds of those of us who have had the responsibility of framing this particular measure.
I should like to remind the house of some of the words used by the hon. member for Winnipeg North Centre himself when he spoke on this matter on June 29, 1950. Referring to the report of the committee, the main recommendations of which have been followed in this legislation, he said, at page 4442 of Hansard:
Having said that, I am convinced that the task of those who are interested in making progress in the field of old age security is to get behind the recommendations of the joint committee which were tabled yesterday in this house. They do not

Old Age Security
go as far as I would have liked to have seen them go. So far as I was concerned, it was a compromise downward to agree to the report. But not only did I agree to it for the purpose of getting what it proposes; I pledged that I would fight for its implementation because my chief concern is to get some real and definite progress in this field of old age security.
These were the words of one hon. member of that committee who had a part to play in the recommendations that came before us in the form of a report presented to this house by the hon. member for Montmagny-L'lslet. He was a member of that committee, like the hon. member for Eglinton. And I may say in passing-I think this is only fair to the hon. member for Eglinton-that his speech this afternoon was in the highest traditions of good parliamentary debate. He took a great part, I know, in the committee's deliberations. Everything that is being done in this bill he did not fully endorse, but he had taken a position, and we were considering recommendations in which he had participated along with all other hon. members who presented the unanimous report. It must not be forgotten that the amount of $40 recommended in this measure is the amount recommended by the parliamentary committee. It was recommended unanimously in June, 1950, by that committee and approved unanimously by the provincial governments with whom we held meetings in December, 1950, May, 1951 and July, 1951. It should not be forgotten also that the proposals made by the government in 1945, based upon the same principle involved in this bill, were for only $30, so the amount contained in this bill is $10 more in amount than that proposed in 1945.
No one is suggesting that this will meet all needs. That is not the argument at all. There is no pension provided by any jurisdiction in the world that can possibly meet all needs.


Angus MacInnis: What about the judges' pensions?


Mr. Mariin:: 
Angus MacInnis: Will that be the limit of the universal old age pension scheme in New Zealand?


Paul Joseph James Martin: No. I am coming to that right now.


Angus MacInnis: Do not forget it.


Paul Joseph James Martin: 
Angus MacInnis: What is the age at which the individual becomes entitled to pension?


Paul Joseph James Martin: Sixty-five years. I am dealing now with the question of the amounts, and at the outset I said there were extenuating circumstances. I am just seeking to show that the amount provided for in this bill, as
Old Age Security
recommended by the committee, is not as inconsequential as some hon. members have in their comments suggested.
Let us look at the United States. The social security act of that country was amended in September 1950 to provide higher old age insurance benefits. The average benefit currently payable, as reported for June 1951, is $42.57. That is the average primary benefit for a single person, the average for a married couple being $63.83. In Canada the benefit will be $40 for a single person and $80 for a married couple when both are on pension. The result in Canada as compared with the United States is that our average pension for married couples is higher than that of the United States and only $2.57 less than the average for single individuals in that country.


William Joseph Browne: At what age does it come into effect in the United States?


Paul Joseph James Martin: Sixty-five years. Remember, the payments are gradual and progressive. I have given the average. All the payments do not come up to that average except in progressive stages. In the United States they apply the orthodox insurance principle to only a portion of their working force, and it is important to note that fact. What this bill does is provide a pension for everyone in Canada without a means test, for farmers, factory workers, office workers and so on. As the hon. member for Eglinton pointed out, in the United States where this orthodox insurance principle is applied there can be only a limited coverage. In that country they cover only a portion of the working force and in order to provide for others who do not contribute they have to maintain a means test program in connection with which the total number of present beneficiaries is greater than under the orthodox insurance scheme. Under the means test old age assistance program in the United States the average payment for all 48 states in June, 1951, was $43.23. As of June, 1951, there were still 2,745,000 individuals in the United States who were in receipt of old age assistance on a means test basis, more than the number of aged persons' who were benefiting from old age insurance.
In the United Kingdom the rates of benefit which were 26 shillings weekly for a single person and 42 shillings for a married couple were increased within the past year. The maximum now payable is 30 shillings for a single person and 50 shillings for a married couple, or about $228 yearly in Canadian currency for a single person and $380 yearly in the case of a married couple. The exchange rate as of October 30 of this year is $2.92 to the pound. Those rates are much below


Donald Methuen Fleming: I think we are at the section dealing with the census. It is subsection 3 of section 3, which is now before the committee. I was going to ask the minister in that regard how soon following the enactment of this bill will the census records be made available by the dominion bureau of statistics to the Department of National Health and Welfare for this purpose.


Victor Quelch: While the minister is on that
question, can he explain why this section limits the utilization of census returns to those taken at least thirty years before the request is made? Will that not mean that if an old age pensioner who has been in this country twenty-four years is unable to prove his age by any other means than the census, he would have to wait until he has been a resident for thirty years in order to receive the benefit?


Paul Joseph James Martin: With respect to the case that my hon. friend has mentioned, we will be able to get the age of that particular person from immigration records. As to the question asked by the hon. member for Eglinton, the situation now of course is that there would be no legal authority for the use of the census by any authority other than the head of the bureau of statistics, and his power to transmit that information of course is, like anyone else's, restricted by the law as it now is. As of December 1, and after the passage of this measure, authority will have been given for the use of the census by the director of the bureau of statistics or anyone delegated by him. In this case it will be the directors in our ten regional family allowance offices who will have microfilm copies, and I suppose as a result of that typewritten sheets, which will contain the census records, which will make it possible to deal with any situation that may be doubtful.
I should point out that even the census records themselves are double-edged in their possible effects. We have had many instances where we know the census record does not accurately state the facts as alleged for some reason or another, and while in most instances we can look upon it as a reliable measure it must be noted that it is not foolproof. The hon. member for Vancouver East pointed out today that it was clearly my duty to see that

the law was observed, and that people who applied for old age pensions were able to establish unequivocally, with help, humane effort and understanding, their entitlement to the pension. Therefore with the existing modes of proof, marriage records, immigration records, insurance records, all sorts of corollary documents, it will not be very difficult, I am sure, for us to deal with the remaining cases, particularly when we consider the great success we have already had in dealing with so many thousands who will qualify for the pension.


Mr. Fair:: When dealing with the question of proof of age a week ago today the minister enumerated, as appears at page 408 of Hansard, the different methods that might be adopted. He went on to mention the types of evidence that may be offered in addition to the bible. I wonder if the word used by him, "offered", might not be changed to "accepted". There is a loophole there that many people do not like. Could that be changed?


Paul Joseph James Martin: We might use the word "considered".


Robert Fair: That means you may or may not accept any of the types of proof that are mentioned here.


Paul Joseph James Martin: It depends on the document. I have no discretion in the matter. If the house approves of the qualification of 70 years of age it is my duty to see that the person who puts in an application is 70 years of age. The documents we have suggested are by no means exclusive. There may be others. I merely gave those as samples of the kind of document we expect, or that might be used. I can assure my hon. friend that when a document is presented and there is any grave doubt, the crown does not get the benefit of that doubt. Nevertheless I must make sure- and when I say "I" I mean the officers of the department in our ten regional offices- as to age. As the hon. member for Vancouver East pointed out today, it is clearly my duty to make sure that those who are qualified get the pension, and the implication quite clearly was, and properly so, that the man or woman who is not entitled cannot legitimately, in the name of good government, be given a pension which the act does not provide for.


Robert Fair: I have no objection whatever to the minister seeing that proof of age is established. However, before coming here for the session one of my neighbours, who was born in Ontario some years ago and who I believe is now about 72, came to me and said she could not get a birth certificate. She did not have one and could not secure it
Old Age Security
at Toronto. I wrote to Toronto, and they have no record of a certificate. This particular-lady had her marriage certificate. She is a widow. Her age is on the marriage certificate. Would that be accepted?


Paul Joseph James Martin: No doubt about that.


Robert Fair: Very good. I should also like to know whether the pensions of persons who make application before the end of the year and have difficulty in establishing proof of age, will be made retroactive to the first of January?


Paul Joseph James Martin: That is right.


Robert Fair: Thank you very much.


Mr.   Johnslon@: May I ask the minister if an insurance policy would be considered as evidence.


Paul Joseph James Martin: I have seen some insurance policies that would not, but most insurance policies would.


Gordon Knapman Fraser: Does the minister mean where they carry the notation, "proof of age acknowledged"?


Paul Joseph James Martin: Yes, some insurance policies have on them clearly the age, date and all that sort of thing. But we have had to reject some policies, and I think the hon. member would have agreed with our decision. Generally speaking, however, the answer would be yes.


Joseph William Noseworthy: Would the age stated on citizenship papers be accepted where no other papers are available?


Paul Joseph James Martin: It would depend when the citizenship certificate was issued. A citizenship certificate issued last week would be evidentiary, but it would not be more than evidentiary. But a certificate of naturalization in 1921 would certainly be absolute proof. It depends, of course, on the circumstances.


Ellen Louks Fairclough: This afternoon I asked whether a marriage certificate dated 1889 would be accepted, and the minister has indicated since that it would be.


Murdo William Martin: I wish to indicate clearly that my hon. friend was not producing her own marriage certificate.


Ellen Louks Fairclough: I can readily understand that the minister would be in some doubt. Nevertheless would it not follow naturally that anyone who was married in 1889 must be over 70 years of age? Some of these old marriage certificates do not give the date. Would the minister say that 1895 would come under the same category? That would mean that they had been married 56 years, and at an age of 14 or 15.

Old Age Security


Paul Joseph James Martin: Around that date.


Ellen Louks Fairclough: Would the minister say that a marriage certificate of 1895 would be accepted as proof?


Paul Joseph James Martin: I had the figure 1897 in my mind.


Ellen Louks Fairclough: Then we will say 1897, and be generous about it.


Paul Joseph James Martin: No doubt about that.


Donald Methuen Fleming: On October 25 I asked a question as to the number of applications which had been rejected.


Paul Joseph James Martin: There are 5,000 rejected.


Donald Methuen Fleming: Rejected, as distinct from cases of applications held for further proof.


Paul Joseph James Martin: That is right. And I should add that the reason was either because they were not 70 years of age, or because of some difficulty about residence.


Stanley Howard Knowles: I wish to thank the minister for the compliment he paid me in quoting a short time ago from remarks I had made on this subject in June of 1950. It so happens that in considering what one might say in debate at this time, and last Thursday, I had considered the possibility of picking some paragraphs out of that speech myself, just to indicate to the committee how keen I have been ever since June of 1950 to see to it that the recommendations of the committee were implemented at the earliest possible moment. The minister will recall that all through last session I kept prodding the government on this matter; and I am delighted, as I have said before, that we are now implementing those recommendations.
However, I must confess that I find it a bit difficult to understand the minister's failure to recognize that there has been a 25 point increase in the cost of living since the committee made that recommendation. One of the reasons that the committee, having done such a good job in getting rid of the means test and getting the eligible age for new pensions down to 65, was prepared to turn in a report that left the figure at $40 a month-even though some of us did not like it-was that the cost of living index was not higher in June, 1950, than the point it had reached. If my memory serves me correctly, the latest figure we had at that time was about 164 or 165; I believe it was 164 at the first of May, and that was the figure we received at the beginning of June. But the cost of living index is now 189-8, and maybe tomorrow or the next day we will have a higher figure. It is because of this 25 point increase in the cost of living index that those of us who have been anxious ever since June

of 1950 to see the implementation of the recommendations of the report are now so deeply concerned with the need for increasing the amount of the pension.
The Minister of National Health and Welfare read a number of quotations from the report of the committee bearing on the question of the level of the amount of a universal pension. For example he quoted paragraph 41 from page 106 of what may be described as the conclusions in the report, where it states:
It is considered therefore that the rate of benefit paid should be set at such a level as to avoid so far as possible the social inequities of a situation in which the retired beneficiary group might find themselves in more favourable economic circumstances than those not yet retired who are still actually engaged in productive employment.
I can remember we had arguments in the committee as to whether $40 did represent that level. At any rate that was the view of the committee as a whole, that perhaps $40 approximated that level. My point is that the cost of living having gone up 25 points since then, that level which

in the words of the report

is reasonable and does not create the social inequities referred to in the other sentence is surely at a higher point. I do not think the minister can make any case at all for the sanctity of that $40 figure-even if he were to quote all the pages in this blue book-in view of the full 25 point increase in the cost of living index since the committee made its recommendations to parliament.
As a matter of fact I had intended to raise this question before the minister got to his feet, and to ask him if the government had not considered the possibility of raising that amount before bringing in the bill, in view of the increase in the cost of living index since June of 1950. I am sure the minister is anxious to answer my question.


Paul Joseph James Martin: I am anxious, but I thought I would let others speak, because I should like to have the bill passed as quickly as possible. My hon. friend has asked me if the government considered it. The government gave this matter the greatest consideration. I think perhaps this would be the proper occasion to give the background of this measure, in its context in relation to our total national obligation.
When the committee made its report to the house in June, 1950, the war in Korea had been on, I think, about a week, and I had just returned from Halifax. I did not have a chance to discuss at length with the Prime Minister or my colleagues the implications of Korea in relation to this report. Hon. members will remember that when I had proposed the setting up of this committee it was charged by my hon. friend and others that

these were delaying tactics, that the government was not sincere in its attempt to bring in .this non-means-test system. That was natural debate.
I indicated that we were sincere and that we were going to establish a committee. I indicated that we intended to give that committee's recommendations the most serious consideration. I came back from Halifax the day the report was discussed in the house. I went down next to the Prime Minister who was in his seat and said that I had not had a chance to discuss with him or with my colleagues the recommendations of the committee, but that I proposed to say to the house that night that the committee had done a very thorough job, perhaps one of the most thorough jobs ever done by a parliamentary committee, that the government was going to give its most sympathetic consideration to its recommendations, and that the report would serve as a basic document in our subsequent discussions with the provinces.
Now, my colleagues and I then did not fully appreciate the extent of our obligations in Korea, or the extent of our obligation under the Atlantic security pact. Since that time this country, in its effort to make a contribution toward the preservation of decency and civilization in the world, has embarked upon a peacetime-in this so-called twilight zone between war and peace-program of defence expenditure which is away beyond the dreams of anyone in this country. When I was a young member in this house in 1938 our national defence expenditures were around $38 million. Today we have committed ourselves to a three-year program of defence building, our defences amounting to over $5 billion. I say to you, in the face of that background, that a government which at this time has had the courage-and I say that advisedly because of the discussions we all had in cabinet and because of the character of the world in which we are living-to bring forward and support this parliamentary committee's proposals in an amount that is exceeded, as I have indicated, by no other country in the world, is a government that certainly cannot be accused of not having given this matter the greatest consideration.


Stanley Howard Knowles: May I point out, despite the type of answer the minister has given, that he has not told me whether the cabinet, in drafting this bill for presentation to this special session of parliament, gave consideration to the plight of our older citizens occasioned by the 25 point increase in the cost of living index since the committee made its report. Surely the government that said it was going to carry out the recommendations of that committee should have considered
Old Age Security
the spirit of that committee's report, as well as its precise wording and its precise figures.
I suggest that the increase in the cost of living index really makes a difference with which the minister has not properly dealt.
He has told us of the increased obligation that we have because of the situation in Korea, and because of our commitments to NATO. There again, Mr. Chairman, is the old story. I know some hon. members do not like us to say it, but we find $1,600 million a year rather quickly when we need it for purposes of defence. I am not denying it is needed. But when we suggest that because of an increase in the cost of living index of 25 points there should be an increase of only $10 per month in the old age pension over what the committee suggested in June 1950, which would amount to only $160 million per year more than we are now spending on pensions, we are told that because of the war we cannot do that. This, too, in the face of the fact that so far in this fiscal year the government has piled up a surplus of over $500 million. I based that statement that $50 per month rather than $40 would cost only another $160 million on the table on page 100 of the committee's report to which the minister himself referred. I am sorry; the increased cost is only half that amount. I must thank the member for Eglinton for correcting me, because I was looking at the $60 column.


Mr. McCusker:: Have you the $80 ready too?


Stanley Howard Knowles: As a matter of fact the table on page 100, if I may say so to the member for Regina City who is laughing at this remark-


Emmett Andrew McCusker: I am not laughing at it, I am just asking if you have the $80 one ready too.


Stanley Howard Knowles: I might tell the hon. member
for Regina City, who is parliamentary assistant to the Minister of National Health and Welfare and who should know what is in this book, that the other column is the column for $100. I was looking at the column for $60, and noted that it gives a figure for 1951 of $485 million which, when compared with the figure given in this book for $40-namely $323 million-makes a difference of $160 million. That is only one-tenth of this year's expenditures on defence. I said that it would cost only that much more; but that would raise the pension to $60, which would be a more reasonable figure. To raise the pension to $50 a month, I look at the other column and find *it would cost $404 million which, when compared with $323 million, makes a difference of $81 million. The estimate contained in this report for the $40 per month has been slightly exceeded in the experience of the

Old Age Security
Department of Finance. Similarly, the other estimates might be exceeded; but the difference is of that order, somewhere between $80 million and $85 million per year, to make up for the 25 point increase in the cost of living index that has taken place since the committee made its report. I like to hear these words of praise for the work of the committee. I am second to none in my enthusiasm for the job it did and for the essential soundness of the recommendations it made. But I submit that the fact that the committee made certain recommendations does not mean that for the next hundred years the pension is going to stay at $40 per month.
The 25 point increase in the cost of living that has taken place since the committee made its report places an obligation on this government-which says it respected the report and was pleased with it-to increase the $40 per month by at least $10. I say again that would mean only $80 million or $85 million per year in round figures, as compared with the fact that we did find $1,700 million per year for defence purposes, and as compared with the fact we have this year piled up a surplus of over $500 million. I do not feel the government has given respectful consideration to the recommendation of the committee in its failure to bring it up to date in terms of the cost of living.


The Chairman:: Shall the section carry?


Mr. Black (Cumberland):: I have one question I should like to ask.


Joseph-Alfred Dion: On section 3 or section 4?


Mr. Creslohl:: I have one question I should like to ask on section 3.


Joseph-Alfred Dion: The hon. member for Cartier.


Leon David Crestohl: In subsection 1 of section 3 I note that the term "resided" is used twice. I was wondering whether the term "domiciled in Canada" would not have been more complete. When we speak of a person who has resided in Canada for at least twenty years immediately preceding the date on which his application is approved, I can visualize that perhaps through illness, and particularly at that age, a person may have to go to another climate for his health. He might still retain his domicile in Canada, because he does retain his domicile in Canada for income tax purposes. Although he may be absent from Canada he is still subject to our income tax. I think therefore, Mr. Chairman, that the words "resided in Canada" should be replaced by the words "domiciled in Canada".


Paul Joseph James Martin: I may say that consideration was given to that matter, and we decided

that the word "reside" better fitted our intentions than the word "domicile". A person might not be in the country and yet have Canadian domicile, as my hon. friend so well knows. He would not have contributed in any way during the period of absence, either through contributions by way of sales tax or otherwise. Under the circumstances, we have decided that the word "reside" fits better the intentions we had in mind than the word "domicile".


Leon David Crestohl: Would the minister be of the opinion that if he retains domicile in Canada, he is no longer subject to making contributions to income tax?


Paul Joseph James Martin: No, sales tax.


Leon David Crestohl: Not sales tax but income tax.


Paul Joseph James Martin: We hope to raise about $145 million through the transfer of 2 per cent of the existing sales tax and that is something towards which he would have made no contribution. We have fully considered that matter.


Joseph-Alfred Dion: Shall section 3 carry?


Percy Chapman Black: I should like to ask a question somewhere in here on section 3 or 4 or 5.


Joseph-Alfred Dion: We are still on section 3.


Percy Chapman Black: I can ask it on
section 3. I should like to ask the minister at what stage a person will be eligible for pension after January 1: in one month, three months or six months? At what stage before he reaches the age of 70, when he will be eligible to receive a pension, should he apply for the pension so that he would be recognized as being eligible?


Paul Joseph James Martin: At 69J years.


Percy Chapman Black: I am referring to the future.


Paul Joseph James Martin: Yes.


Percy Chapman Black: When that person reaches the age, subsequently to January 1,. 1952, how many months prior to or at what time in advance of the time that person reaches the age of 70 should that person apply for old age pension?


Paul Joseph James Martin: As I said, at 69j, or six months before.


Percy Chapman Black: Six months
before?


Paul Joseph James Martin: Yes.


Jean Lesage: Yes, but he does not have to apply six months before.


Paul Joseph James Martin: No.


Jean Lesage: He may apply six months before, but he has to apply in the month preceding the month when he reaches 70.


Paul Joseph James Martin: That is right.


Gordon Knapman Fraser: And the pension starts when?


Jean Lesage: The following month.


Gordon Knapman Fraser: From the date of the application?


Paul Joseph James Martin: That is right.


Robert Fair: In subsection 3 of section 3 provision is made in connection with proof of age, to the effect that reference may be had to any census taken more than thirty years before the request for pension is made. I wonder why we have to go back thirty years. Would twenty years not be sufficient?


Paul Joseph James Martin: That provision is the same as the provision in the acts which we passed at the last session of parliament, the Old Age Assistance Act and the Blind Persons Act. As I said, when I spoke in answer to a question put by my hon. friend a few minutes ago, the census is a double-edged weapon. It is not an absolute measure. For one reason or another a person may possibly have given an age that was not accurate. It might have been lower than the actual age, and so on. By going back for that period we feel that it adds to the strength of the evidentiary quality of the census as a measure of proof.


Robert Fair: In connection with that matter, I think you will find that a number of other records may not be accurate either. I am thinking, for instance, of immigration records.


Paul Joseph James Martin: That is right.


Robert Fair: I have been told by some who are connected with the old age pension administration that when someone entered the country and had a number of children, he would possibly give their ages as two or three or four years younger than they actually were. I guess you have to be careful.


Paul Joseph James Martin: That is right.


Mr. Macdonnell (Greenwood):: In section 3 (1) (b) there is the phrase "has resided in Canada" for the twenty years, and so on. Then in paragraph (i) there is used the phrase "has been present in Canada prior to those twenty years". Is there a different sense in those words "has been present" from what there is in the phrase used above "has resided"? Is it not the same thing? If so, why are the two different phrases used?


Paul Joseph James Martin: One counts the days in the phrase "has been present".


James MacKerras Macdonnell: Could the minister not agree that what paragraph (i) 94699-42
Old Age Security
says is that if you have not been here for a continuous twenty years, then you can look back prior to that and see if there is twice the gap, or twice the amount needed; and if there is twice the amount, then you can make up that gap in your twenty years. I wondered why different phrases are used. It seems to me that it may be confusing.


Paul Joseph James Martin: As I say, one counts the number of days. When we use the phrase "twenty years", it does not mean a full twenty because, under the act and the regulations, following the practice in the Old Age Assistance Act, one year does not mean twelve full calendar months, because a certain period of absence is allowed, namely sixty days. So where you calculate the number of days, as we do in subsection 1 (b) (i), you are calculating there the actual time; whereas where it says "has resided in Canada for the twenty years", you are not speaking of a specific number of days. It may be a full 365 days, but more probably it is 365 less 60 or some lesser amount than 60.


James MacKerras Macdonnell: I may say
quite frankly that I cannot follow the minister. It seems to me that what you are doing is measuring. That is the tenor of those two subsections. When the minister says you are counting the days, I cannot follow him. I am not going to press the matter further because it may not be of importance. But it seems to me that you are using two different phrases to describe exactly the same kind of thing; and if you are, it seems to me that you may be running yourself into confusion which is unnecessary, if I understand it correctly.


Paul Joseph James Martin: It has been in the old act and the present act since 1947 and it has worked satisfactorily.


Donald Methuen Fleming: I should like to put this to the minister in the light of the question asked by the hon. member for Greenwood, I suggest that "reside" and "be present" are two quite different things. A man can have his residence -in Canada in the sense of being ordinarily resident here, which means ordinarily present, and yet be absent for perhaps an extended period.


Paul Joseph James Martin: That is right.


Donald Methuen Fleming: In paragraph (b), "has resided in Canada" means he has had his ordinary place of residence in Canada. So when you come to paragraph (i) of paragraph (b), you are thinking then simply in terms of physical presence in Canada.


Paul Joseph James Martin: That is right. You are counting the actual number of days.

Old Age Security


Donald Methuen Fleming: In paragraph (b) you are thinking about the actual residence in Canada for the twenty years immediately preceding the date of application. They are two distinct things, and I think it is proper that the language used in each clause should be distinct.


Joseph-Alfred Dion: Shall clause 3 carry?


Herbert Wilfred Herridge: Before the clause carries, may I say that I am particularly interested in exploring the various ways of trying to prove age, because in a number of cases that I know of the great difficulty is in that respect. I should like to ask the minister this question. Would a newspaper account of a man having been a witness in a murder trial fifty years ago be accepted as proof of age?


Paul Joseph James Martin: Yes.


Herbert Wilfred Herridge: Would a newspaper account of a man having served on a jury fifty years ago be accepted as proof of age?


Paul Joseph James Martin: Certainly.


Donald Methuen Fleming: Who is the applicant there? Is it the murderer?


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5-Suspension of pension.
Major James William Coldwell: I have been particularly interested in this section ever since the Minister of Finance stated that this was in effect a contributory plan. The hon. member for Montmagny-L'Islet, the chairman of the committee, seemed to agree that if that were so, no matter where the individual lived, having paid it he was entitled to receive the pension or annuity as the case may be. I think that is sound reasoning. If during the course of one's lifetime one pays, in some form or another, for the annuity at age 70, then that annuity is of right and should be paid regardless of where the individual lives. I said the other day I understood that was the principle in the United Kingdom act, and I believe in some other acts. Consequently, Mr. Chairman, I move that subsection 1 of section 5 be deleted and the subsections renumbered accordingly. I think there is every reason why that amendment should be supported by the committee or indeed, better still, accepted by the minister in charge of the bill. I would be delighted to withdraw the amendment if the minister is prepared to say that the amendment, or the substance of it, will be accepted by the government.


Paul Joseph James Martin: Mr. Chairman, I would suggest to you with great confidence that this amendment, while it represents what my hon. friend intends, is clearly out of order, as it does involve a proposal that would add to the expenditures of the crown and is therefore not within the competence of my hon. friend to propose. I do not deal now with the merits of the amendment, but I do suggest to you that it is clearly out of order.


Major James William Coldwell: I would suggest this to the minister. If that is so, and I think there is some validity to the point he has raised, he himself could move the deletion. Why not let this clause stand tonight for further consideration? Personally I think if what has been said by the Minister of Finance and other members on the government side of the house is true, that either through the sales tax or through the contribution of 2 per cent -and we have seen it demonstrated that at certain ages, at age 30, for example, a young man making that maximum contribution will buy an annuity at age 70-a fund cant be built up sufficient to provide a pension at 70, if the argument they use is properly hased and sound, we have no right to limit the individual in any respect in the receipt of the annuity for which that individual has paid. I suggest that I would be glad to withdraw the amendment if the minister would give the matter consideration, and then we could hear what the decision is later on. But if we are to have a plan of this description, outlined as we have had it, and the limit of 2 per cent put on the contribution on the ground that that is all that is required by a young man of 30 to buy an annuity at age 70, then I think we are on strong ground in asking that this bill be amended as suggested.


Frederick Davis Shaw: Mr. Chairman, my colleague-


Joseph-Alfred Dion: Is the hon. member speaking on the point of order?


Frederick Davis Shaw: No.


Joseph-Alfred Dion: Since a point of order has been raised I have to give a decision. I would refer hon. members to citation 486 of Beauchesne's Parliamentary Rules and Forms, third edition, which reads:
Reductions can be made in committee on the bill, but no grant can be increased except upon recommendation of the crown.
No private member can move an amendment to increase the amount. Therefore I must rule the amendment out of order.


Frederick Davis Shaw: We certainly join with the hon. member for Rosetown-Biggar in requesting the minister to reconsider subsection 1 of section 5. This is one of the matters I had

in mind this afternoon when I suggested to the house that we should give extremely careful consideration to any or all provisions which might have the effect of depriving one of the benefits after he has paid into the fund over a period of ten, twenty, thirty, forty or fifty years. While we agree with you, Mr. Chairman, that under the rules of the house it is not possible for a private member to move an amendment of that kind, we certainly do feel that it is deserving of an explanation from the minister; and I suggest that he let it stand.
I should like to ask the minister whether he is able to give information with respect to the provision which may have existed in the old non-contributory act with respect to this matter of absenteeism from Canada.


Major James William Coldwell: Since you rule the amendment out of order, Mr. Chairman, may I put this to the minister? I understand that the limitation of $60 is owing to the fact that by paying more than $60 a person would not receive all that he pays in. If that is so, then is not the individual by the same token entitled to all that he has paid for? If he has paid for an annuity he is entitled to it regardless of where he may be. It is the government that has introduced this matter of annuity and the basis of universal contributions for a universal benefit. That is the argument that has been used by the government. I am merely accepting their argument and basing my contention in this regard upon it, and upon their own premise. I should like the minister to reconsider this clause.


Mr. Gibson:: It is not too often that I find myself so completely in agreement with the leader of the C.C.F. party.


Stanley Howard Knowles: You have to be right once in a while.


John Lambert Gibson: In this particular instance I agree that he has a valid point. The amendment may be out of order. I am sure it is if you so rule, Mr. Chairman; but I would like to think that the government would give this matter very careful consideration and probably do as the leader of the C.C.F. party suggested. As the minister said, these pensions are now given as a matter of right. They are not charity. It has also been very firmly established here that we as Canadian citizens are going to pay for them. I have residents in my riding from the old country who are receiving pensions from that country. I should like to think that our old people who might find it necessary to go to live with relatives in the United States-we have a great many Canadians down there-would not be deprived of that for which they have
Old Age Security
paid, and what their sons and daughters remaining in Canada will continue to pay for. I should like the government to give the matter further consideration.


Major James William Coldwell: It would affect very few
people.


Paul Joseph James Martin: I do not fail to appreciate
how the question would arise in the minds of some hon. members. But I am sure that with the explanation I propose to give the question will be seen in its true perspective. It is not a matter that we have looked at lightly. Because of the factors involved I think I should clearly indicate in detail the reasons for the provision. The arguments put forward by the hon. member for Rose-town-Biggar are largely based on the declaration of the Minister of Finance of the objective of this measure, namely the system of special contributions to provide the financial wherewithal for this measure. Because of this objective it is now argued that no one who leaves the country should be denied the opportunity to benefit while outside the country. One must think of this in the light of the committee's own consideration of the problem. It is true that the committee did not undertake the responsibility which I think belongs to the government, particularly to the Department of Finance, that is fiscal policy, but the committee did project certain examples of the type of financing which it put forward tentatively. One of these, perhaps the most prominent and certainly the most discussed after the committee's report was made public, was the proposal for a 2 per cent levy on all individuals and on employers with the idea of relating as nearly as possible benefits to payments. This was suggested as applying to a much wider group of contributing and paying individuals than is contemplated in the legislation now before us.
In that example, the exemption for a single person was to be lowered to $750 and that of married persons to $1,500, recognizing the principle of exclusion. If that had been adopted, while I do not say my hon. friend's argument would have been completely valid, it certainly would have been very strong. But what should be noted is that the fiscal proposal actually put forward, for single persons the exemption is left at $1,000 and for married persons at $2,000. One could argue incidentally and parenthetically that the obligation imposed upon the smaller income individual is much less onerous under this proposal than in the proposal projected in the example given by the committee, to which I have just made reference.
652

Old Age Security
The assumption of my hon. friend's argument is that many more people are contributing toward this scheme than is actually the case. I confess personally that if it were practical-I am convinced now, as are my colleagues, of the impracticability of the greater reach-we wanted to have the greatest coverage, to have the greatest possible number of people receive the widest benefits. But we were faced with the practical consideration that the lowering of exemptions, apart altogether from putting a greater burden on the lower income persons, would create the greatest of administrative difficulties in collection and so on. If that had been done there would have been stronger validity to the argument of my hon. friend.
This problem is not new. The hon. member for Red Deer asked the practice under the present Old Age Pensions Act. The practice there is that if a man leaves the country his payment is suspended, but it can be reinstated when he returns. Admittedly the problem does have a feature of difficulty, and it is not one that we alone have had to face. Other countries have been faced with this problem. I am certainly convinced that after taking into consideration all aspects of the problem we have arrived at a reasonable and fair provision in regard to this matter, at least for the early years of the program's operation. It must not be forgotten that the people of 70 years and over who will be receiving pensions under this scheme will, while they are living in Canada, be making continuing contributions through the sales tax. People who leave the country-and there are people who undoubtedly would for a great length of time, which was the point raised by the hon. member for Cartier-such people would be outside the reach of the application of this continuing tax.
I can only say that we shall have to look at the matter to see whether we have been too strict. I think in principle we are right. Experience will indicate, as the program matures and takes on more distinctly the characteristics of a contributory system, whether or not some amplification of the provisions presently proposed will be desirable. The hon. member for Rosetown-Biggar has argued that since the program is to be based-he was not complete enough in his statement-in part at least on the principle of individual contributions the pension should be paid as a matter of right, and the individual should be able to draw the pension whether he continued to live in Canada or in another country.
The section refers to absences of the pen-[DOT] sioner from Canada and the effect on the payment of his pension because of such

absences. It will be noted that he may be paid the pension retroactively under the section for the entire period of his absence if it does not exceed three months of any calendar year. The effect of that is-this is important-that he may be absent for a continuous period of six months without loss of pension, provided those six months are spread equally over two years, as for instance October 1, 1952 to April 1, 1953. That would mean in effect that a person could be absent from Canada for unbroken periods of up to six months every second year.
The position of a retired worker under the old age and survivors insurance program in the United States is altogether different. That scheme is an orthodox contributory scheme to which only a limited number of people in the country contribute, such as the worker who can be reached by payroll deductions and the employer. There is no contribution whatsoever out of the general revenues of the United States. Just as in any scheme involving an insured and an insurer, absence from the country does not vitiate such a contract. That is the situation under the orthodox contributory scheme in the United States.
But that is not our scheme. In the United States only a limited number of people contribute. Contributions are limited to those who are capable of being reached by a payroll deduction plan, and they represent less than half the workers of the country. I am sure the difference between that system in the United States and ours will be apparent. In that case there is no contribution made from the general tax revenue; it is a direct private contractual arrangement between two parties, the employer and the employee. In our case the proposal is that there shall be a 2 per cent tax on corporations and a 2 per cent tax on individuals. The estimated revenue in the case of individuals is about $90 million; in the case of corporations, about $60 million, with $145 million to be raised by 2 per cent of the existing .sales tax. That presents an altogether different scheme, one that does not give rise in any way to the same moral obligation which I suspect my hon. friend has in mind when he speaks about this matter. All persons 70 years of age and over with a certain period of residence in the country will be able under our scheme to draw benefits automatically as of right whether in fact-and this is the important thing-they have made any personal contributions at all. That is not true in the case I have taken in the United States.
The provisions in our new law dealing with direct personal contributions will affect only

those persons who are income tax payers, and the number of income tax payers is distinctly a minority of the total of our population. It is correct to state therefore that roughly 50 per cent or more of the beneficiaries of this new program will be individuals who have not at any time made a direct personal contribution into the fund. They will have made it in respect of the sales tax, but if we were to give this right to people to leave the country we would be giving them a preferential position as opposed to those individuals who, if not making a direct contribution, are making a very significant contribution through payment of the sales tax. My hon. friend nods his head.


Major James William Coldwell: I shook my head. I did not nod it.


Paul Joseph James Martin: He shook his head, meaning that he does not agree. I am sure he will not disagree that a man who leaves the country and goes to Florida, California or some other place-


Major James William Coldwell: Will the hon. member permit a question? When did I suggest that a person who left the country during the period when he should be paying should receive the old age pension? I said nothing of the kind. I suggested that when a man reaches the age of 70, based on his contributions through sales tax or income tax he is entitled to a pension as of right. What he does after that is none of our business.


Paul Joseph James Martin: 1 was going to refer to the Minister of Agriculture, but he would not be a fair example. He is too young. The Minister of Public Works will soon be 70. When he is 70 he will be continuing to make a contribution towards this pension. He will be paying his share of the sales tax.


Stanley Howard Knowles: Will he not go to the Senate?


Paul Joseph James Martin: But Mr. X, who has not the same obligations, who leaves this country and goes to the United States or some other country, will be free from every obligation.


Major James William Coldwell: All right.


Paul Joseph James Martin: I think my hon. friend would agree with that.


Major James William Coldwell: Oh, no, I do not agree with that argument.


Paul Joseph James Martin: As a matter of fact there are only about 40,000 or less income tax payers in the entire number of 700,000 persons 70 years of age and over. Therefore even when the new provisions respecting contributions become effective in July of 1952 only a small number of persons in the age group eligible for pension will be making any direct contribution toward the cost of the benefits they
Old Age Security
will receive. Furthermore, it will be recognized that a substantial portion of the cost of the new program will be borne out of existing tax revenues through diversion, as I said, of one-fifth of the present sales tax revenue into the fund.
These considerations, it seems to me, indicate why this step is a wise one, certainly at the present time. It will be of interest to know that the effect of these new provisions in the old age security legislation is comparable with the provisions which now apply in our unemployment insurance program, which is also based upon direct employer-employee contributions as well as a contribution from general tax revenue. Under unemployment insurance, the unemployed workman has bought and paid for his unemployment insurance benefits. It might be argued therefore, following the line of reasoning of my hon. friend, that he should be free to draw his unemployment insurance benefits during periods of idleness no matter what part of the world he might go to.


Major James William Coldwell: That is nonsense.


Paul Joseph James Martin: I would have hoped my arguments might be clothed in some other words of characterization, but perhaps they are not so deserving. The fact is, of course, that the unemployed insured workman has to report personally to the unemployment insurance office each week in order to continue to be eligible to draw his unemployment insurance benefits. While the act does not specifically say so, the effect of that is that the individual, to all intents and purposes, can only draw his unemployment insurance benefit which he has bought and paid for if he continues to reside in Canada.
I have examined the position with regard to old age pensions. My hon. friend brings up the question of the United Kingdom. We looked into what they do in the United Kingdom and other countries. The United Kingdom provisions, remember, resemble closely those of the United States. They do not resemble our scheme, but there again the old age benefit in the United Kingdom program is one which the individual has bought and paid for to a considerable extent by direct personal contribution. No person in the United Kingdom-and this is important -can qualify for the benefit unless he can prove that in addition to having reached the age of eligibility he has made contributions over a period of at least ten years. That is not what we are doing. Under such circumstances he is entitled to full benefit. If he has contributed only for seven years then he draws a partial benefit. If he has made no contribution at all then he is wholly ineligible to draw any benefit

Old Age Security
whether he lives in the United Kingdom or elsewhere. That is not our case. Under our scheme whether or not a man has made a contribution he will be entitled to the benefit while he is in the country. Contrast this more restrictive arrangement with the provisions of the Canadian law which make it possible for a person to qualify for benefit on proof of age and residence without having to establish the fact that he has made any direct contribution to the cost of the scheme. The systems in Sweden and New Zealand are the ones which are more comparable with our own. They have both adopted modified systems of universal old age pensions unlike the United Kingdom and the United States and more like our own. In Sweden the law provides that the benefit may be paid only to persons while they are resident in Sweden and only to persons who are Swedish hationals. Therefore in Sweden, even though you have made direct contributions, under no circumstances do you receive any benefit whatsoever after departure from the country.
In New Zealand, which is a scheme that is almost fully comparable with our own, until 1948 the law provided that after a person reached the age of 65 he could not draw his universal superannuation benefit during any period of absence from New Zealand, with the single exception that under special circumstances he could, in the discretion of the administering authority, continue to draw benefits during temporary absences for a total aggregate period not exceeding six months. This does not mean six months in any one year. This means a total of six months absence during his entire lifetime from the age of 65 onward. This was modified by the 1948 amendment to the New Zealand legislation, and the act now provides that the administering authority may, in its discretion, continue to pay the pension in whole or in part during temporary absences from the country, but a cable I have from New Zealand indicates that their administrative practice results in practically the same situation as the old act. Therefore in New Zealand and Sweden, the systems that are more comparable with our own, there is not even the generous provision that we have in ours. I am sure if my hon. friend will give weight to what I said said, as I know he usually does, and to my comparisons of various systems, he will agree with me that the argument I have adduced is both responsible and unanswerable.


Major James William Coldwell: I always give due consideration to what my hon. friend the minister says, whether it is said to me in the house or outside. I have a very warm regard for the minister, as he knows, but let me point this out. I think he has put on the record tonight

a statement that somebody else drew which is full of inconsistencies. I did not raise the point of annuity payments in connection with this plan. Indeed, I do not want to see an annuity plan operating in the manner in which, as my hon. friend indicated, it operates in the United States and some other countries. I have always opposed that and will continue to oppose it. But the argument that has been used in the house is that the limit of $60 has been placed on the payments, in connection with the 2 per cent income tax proposal, because that $60 payment is all that would be required from a young man of 30 to obtain an annuity of $40 a month at the age of 70. I did not raise that; the Minister of Finance raised it. Other members on the government side of the house have raised it. I am going to say this to my hon. friend, that there are no people in this country who will not contribute to this plan in some manner, either through the sales tax or the income tax.


Paul Joseph James Martin: That is right.


Major James William Coldwell: Consequently if they contribute they are entitled to what that contribution should bring them when they attain the age of 70. As a matter of fact a person in Canada paying all the years from 20 to 70, and then going abroad-if I may take the very example which has been given by the government-will not get what he has paid for. If he leaves the country at that time he will not get it. On the other hand someone 50 years of age coming to this country and remaining here for twenty years will be entitled to $40 a month. In other words a man who has lived, worked, produced and paid during fifty years in this country, * and who moves to Arizona because of being a victim of asthma, or moves to a milder climate on the Pacific coast, south of British Columbia, because of suffering from some other disease, will not get what he has paid for. But, as I say, someone who has come to this country at the age of 50 years and who has spent twenty years here will be entitled to the benefits of the pension. I am not objecting to that; I think it is proper that that should be done. But I am pointing out that on the government's own showing this clause is wrong and unjust, and I say it should be removed from the bill.
So far as comparing this with the unemployment insurance plan, I say there is no analogy at all between the legislation or between the plans. They are on entirely different bases. I say to the minister that it is unfair as it applies to a man who for 50 years has produced, paid sales tax, perhaps paid income tax for the whole 50 years and who, on account of ill health or for some other reason, has to move and finds that he gets

nothing when, on the other hand, someone else who has come into the country at the age of 50 and stays here for twenty years is entitled to the pension of $40 for the balance of his days. As I said1 before, while I do not want to deprive him of the benefits, the situation is wrong.


Mr. Johnston:: In section 5 it is stated that where a pensioner absents himself from Canada payments shall be suspended immediately. It seems to me the minister may have some ground-and I use that word advisedly -for not allowing a pension to a person who leaves the country for a period longer -than six months, or for an extended period of more than six months carried over two years. But let us suppose a person wanted to go to England to visit his relatives. If he is gone one month, then the payment stops. It is true that if he stays there three months, payment will be resumed when he -comes back. However if he stays there the full three months, he will receive payment only for the month in which he left. He will receive no payment for the second month he was there, or for the third month. If he came back in the third month payment would be retroactive. I believe I am correct in that.
It seems to me this is quite wrong. Surely a person who is living here and who wishes to go to England to visit a son or daughter residing there could not have a decent trip and a satisfactory visit in one month. Such person should be entitled to receive pension for at least three months while away. If he stayed longer than three months without returning to this country the minister might have some justification for discontinuing payment of the pension; but surely it should not be discontinued in the first month he is away. I suggest the minister should reconsider the section and extend the period of absence up to three months, with pay. If absence is longer than that, payment could be cut off. It does not seem fair or just, however, that just because a person has reached the age of 70 he should be barred from visiting his relatives in England or the United States, or some other country for any extended period of time, unless he is prepared to forfeit his pension. Would the minister consider revising this section so there might be more leniency?


Donald Methuen Fleming: Sometimes a logical mind is a handicap in trying to follow debates in the house. I have followed with keen interest what has been said in support of the argument that persons leaving the country after reaching the age of 70 years should not be deprived of the benefits gained for them by their contributions.
Old Age Security
The hon. member for Rosetown-Biggar confined his proposed amendment to subsection 1. I think it is worth spending a moment to relate that argument to subsection 2. Here we have a provision whereby if a pensioner is convicted of an offence and sentenced to a term of imprisonment exceeding thirty days, payment of his pension shall be suspended when his term of imprisonment commences, but may be resumed upon the release of the pensioner from imprisonment. If this is a contributory scheme, which in strict truth it is not, there should be no right during the period of his imprisonment to deprive the prisoner of the pension he has earned by his contributions.


Stanley Howard Knowles: He gets a better pension there.


Donald Methuen Fleming: That is the theory back of this provision, that he is being provided for, being given more or less comfortable bed and lodging and receiving his food for this period in excess of one month, and that therefore he should not have the benefit of the pension as well. But if his pension is earned by his own contribution, in other words is strictly speaking on a contributory basis, then an additional penalty or fine is being imposed on the prisoner, because there is no right to deprive him of his pension during the period of his imprisonment.


Major James William Coldwell: Set it off against board and lodging.


Donald Methuen Fleming: No. Board and room are something entirely different. He is a pensioner as of right, having contributed. Therefore if we are going to be logical we cannot deprive the prisoner of his pension, because it is his as of right.
The fact of the matter is that we are leading ourselves into confusion of thought through our use of the hackneyed -and not very accurate word "contributory". I am not blaming anyone for beginning the use of the word in this debate, because it has been used on both sides during the course of this discussion. But if we are thoroughly honest about it we had better find a more accurate word than the word "contributory" to describe what we are talking about. Bet us call this a universal pay-as-you-go pension scheme that is based upon the earmarking of certain taxes into a special fund. Let us avoid the word "contributory", because it is leading us to a point where we are drawing conclusions which can be attached only to an orthodox contributory scheme where the pension is purchased and the benefits are related to the amount paid. If we started today with an orthodox contributory scheme, there would be very little in it for anyone for a

Old Age Security
long time. You would not be starting to pay $40 per month now. You could not expect to make a payment to anybody equivalent to $40 per month, unless you exacted very large contributions, for probably another twenty years. So, Mr. Chairman, in the interests of trying to keep this debate accurate and logical, I suggest that we do not use this hackneyed word "contributory" we have been bandying about.


Major James William Coldwell: X did not introduce the word "contributory" into this debate. It was introduced by the government to explain why a limit of $60 was placed on the income tax provision. If this is a pay-as-you-go plan I shall be satisfied to accept it as such with the limitations that are here. Under these conditions I say we should remove the $60 limit on payments, and make it a pay-as-you-go policy with everyone paying according to his ability. The burden should not be put on the middle income group with $3,000 of taxable income, and on people who, to some extent at least, can ill afford to bear it, because the sales tax touches the people in the lowest bracket.


Paul Joseph James Martin: We can discuss that again on section 10.


Major James William Coldwell: I thought the minister was nodding his head in agreement with me, so I was very happy to sit down.


Robert Fair: When I attempted to get the floor a few minutes ago it was with the intention of supporting the argument made by the hon. member for Rosetown-Biggar. Since my neighbour beat me to it, I rise now to support the arguments advanced by both hon. members. When it comes to contributing taxes, I think all of us are contributing to a large extent at the present time. If our affairs are well managed I do not think anyone will want to leave this country unless he has to do so for reasons of health or business.
In dealing with the arguments advanced by the hon. member for Rosetown-Biggar, I think the minister talked all around the subject. He may be placed in the category of that preacher who, when he preached a sermon and came to a point that he thought weak, yelled like hell. In this case he talked like hell, because in my opinion he did not deal with the argument at all. In the interests of justice and fair play to the pensioners, who after all do not have many years to look forward to after 70, I suggest that the minister let this clause stand, talk it over with his officers, and see that a humane decision is made.


[Stage Direction]
Section agreed to.

On section 6-Regulations.
Stanley Howard Knowles: Section 6 is the section which provides for setting up regulations. There is one question in particular that I should like to ask the minister concerning regulations that may be set up under this act. When the minister was speaking on October 25, as recorded on page 382 of Hansard, he gave quite a long list of the various groups of people who would qualify for the pension.


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: As a matter of fact, he had already made the statement that everybody would qualify, but being a lawyer he went on to state that, without restricting the generality of the foregoing, it included a long list. The minister said that the scheme would include retired employees of industrial or commercial corporations, of municipal, provincial-am I in order in giving the list? The minister even referred to recipients of war veterans allowance. May I do the same?


Paul Joseph James Martin: Do not follow the minister, because it would be a bad precedent.


Stanley Howard Knowles: I would be running around and around and around. But I wanted to refer to the categories set out in paragraph four, one of which was retired missionaries and retired employees of the various commercial corporations and municipal, provincial and federal governments. As I understand it, under the present Old Age Pensions Act, the regulations were changed in 1947 and provision was made whereby a missionary who had been abroad most of his life would have the period of residence abroad counted as residence in this country if it was always the intention of that person to return to Canada. That was a welcome change, and I should like to know whether it is intended to carry forward that same principle in the regulations under this act?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: Will it apply to those other people mentioned in that paragraph, for example Canadians who have been abroad for Canadian commercial corporations?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: And those in government service and on diplomatic missions?


Paul Joseph James Martin: All that category will be amply protected.


Stanley Howard Knowles: The minister is saying yes so often that we should carry on.


Paul Joseph James Martin: The answer is yes.


Stanley Howard Knowles: What then happens to the recipients of war veterans allowances?


Paul Joseph James Martin: The recipients of war veterans allowance are going to be treated the same under this bill as any other citizen of Canada. What happens under the war veterans allowance legislation is a matter to be dealt with when that legislation is before the house.


Stanley Howard Knowles: This matter has to be looked at in its entirety-


Paul Joseph James Martin: The minister always sees
things in their broadest perspective.


Stanley Howard Knowles: When the recipients of war veterans allowance receive this pension, and it is counted as a pension for income tax purposes-


Some hon. Members:: Order.


Stanley Howard Knowles: -they will suffer the loss of that much from what they are receiving under the War Veterans Allowance Act.


Paul Joseph James Martin: I think in all fairness to the defenceless member for Fraser Valley whom 1 stopped, I cannot allow this to continue.


Stanley Howard Knowles: I think the minister was wrong on that occasion. He should have let the hon. member for Fraser Valley continue. In fact, even as the minister dealt with the relationship of old age pensions and government annuities, I feel we should have the right-


Joseph-Alfred Dion: Order. I must remind the hon. member that it is section 6 that is under discussion.


Frederick Davis Shaw: I should like to say a few words on section 6, Mr. Chairman. When the old age security committee first met it was decided that letters would be sent to ministers of public welfare in the various provinces asking for suggestions in connection with the committee's deliberations. The deputy minister of public welfare for the province of Alberta did submit the suggestion that perhaps some consideration should be given to the question of persons who are maintained in institutions, whether they be mental or other institutions. He pointed out that eighteen months ago the average cost of maintaining a person in such an institution was $95 monthly. The federal government paid their share of the pension, namely $30, the provincial government, $42.50, and the municipal government, $22.50. The cost during the past eighteen months has increased, so this becomes of very vital concern to the provinces. Is it the intention of the federal government to make payments in full to the provinces where persons 70 years of age and over have to be maintained in those institutions because of illness, or infirmity, whether that be physical or mental?
Old Age Security


Paul Joseph James Martin: Yes.


[Stage Direction]
Section agreed to.
Sections 7 and 8 agreed to.
On section 9-Offences.
Frederick Davis Shaw: I should like to know what subsection 2 of section 9 really means. It reads:
No information or complaint for an offence under this act is open to objection on the ground that the information or complaint is for more than one matter of complaint or that it relates to more than one offence.


Paul Joseph James Martin: It is merely to permit us to be able to lay a charge for say five violations instead of having to lay five separate charges. It is just something we have learned as a result of experience under the old act.


[Stage Direction]
Section agreed to.
On section 10-Old age security tax.
Joseph-Alfred Dion: Shall section 10 carry?


Paul Joseph James Martin: No, Mr. Chairman. We will let sections 10, 11 and 13 stand. We could now deal with and pass section 12.


Donald Methuen Fleming: Is the minister not going to deal at least with the first two sections of section 13?


Paul Joseph James Martin: Yes. We can deal with the first two, but let us deal with section 12 first.


Joseph-Alfred Dion: Shall sections 10 and 11 stand?


Paul Joseph James Martin: Yes.
Sections 10 and 11 stand.
Section 12 agreed to.
On section 13-No further contributions under Old Age Pensions Act.


Donald Methuen Fleming: If the Minister of National Health and Welfare is going to pilot through the first two subsections, I should like to take strong objection to the terms of subsection 2 which now provides:
The governor in council may repeal the Old Age Pensions Act by proclamation.
I object to language of that kind. It is only parliament that repeals. It may be that parliament will give power to the governor in council to proclaim the repeal; but it is not the governor in council that does the repealing. I think there has been faulty draftsmanship here. I would not wish to see parliament legislating in language like that. I think that, on consideration, the minister will agree with what I say. What that subsection should provide is that the Old Age Pensions Act should be repealed on a date to be proclaimed by the governor in council.

Old Age Security
Let us not have language in an act of parliament like that which appears in this subsection.


Paul Joseph James Martin: I think the language suggested by my hon. friend is better. I would accept his suggestions, I think.


An hon. Member:: Let it stand.


Paul Joseph James Martin: No. We could accept that.


Alphonse Fournier: Let it stand.


Paul Joseph James Martin: No. We can accept that.
Mr. Cold well: Let it stand for redrafting.


Paul Joseph James Martin: The Minister of Finance will not be here tomorrow. We can let it go through. That is satisfactory. It is the same thing. It is just better draftsmanship.


Donald Methuen Fleming: It is not the same thing.


Paul Joseph James Martin: May I just say this-


Donald Methuen Fleming: It may result in the same end.


Paul Joseph James Martin: The purpose of leaving the matter in this way was that while to all intents and purposes the Old Age Pensions Act will cease to be operative once this act comes into being, it will not completely cease because there will be some adjustments that will have to be made as between the federal government and the provinces. Some payments will have to be reconsidered, and so on. The exact date of repeal cannot be actually ascertained. That is the reason this subsection is put in. I think perhaps under the circumstances I should like to consider overnight the exact suggestion my hon. friend has made; but at the moment it looks to be acceptable. We could leave it for further consideration.


Donald Methuen Fleming: What the minister says is perfectly right. It cannot be determined now at what date the repeal would come into effect.


Paul Joseph James Martin: We could pass subsection 1.


Donald Methuen Fleming: I am concerned that we do not pass this subsection. Parliament will do the repealing. The date will be set by the governor in council, but parliament has to give that power to the governor in council.


Paul Joseph James Martin: We could pass subsection' 1
and allow subsection 2 to stand subject to reconsideration of the wording.


Joseph-Alfred Dion: Shall subsection 1 of section 13 carry?
Section 13, subsection 1, agreed to.


Joseph-Alfred Dion: The remainder stands.
Progress reported.



BUSINESS OF THE HOUSE

Major James William Coldwell: What is the business for
tomorrow?


Alphonse Fournier: Tomorrow we shall
take up the following resolutions appearing on today's order paper: Resolutions Nos. 7, 4, 3, 6 and 8.


Stanley Howard Knowles: At the opening of today's
sitting the Minister of Justice (Mr. Garson), in referring to a resolution which appeared in Votes and Proceedings for yesterday, mentioned that he would deal with it when it was being discussed tomorrow. Tomorrow the motion to set up that special committee will appear on the order paper under notices of motion. Can we be told now whether, when that notice of motion is called, it will be proceeded with?


Alphonse Fournier: Is it the wish of the
house that we proceed with that notice of motion tomorrow?


Stanley Howard Knowles: We just want to know.


George Alexander Drew: It cannot be proceeded with.


Stanley Howard Knowles: Oh yes, Mr. Speaker. The
point is that it will be a government notice of motion, one of those sudden death kind _ that are sometimes called over there without warning. As far as I am concerned it is immaterial whether it is proceeded with tomorrow or next week; but we should like to know when it will be proceeded with.


Alphonse Fournier: I always like to have the advice of the opposition. If they wish to proceed with that notice of motion tomorrow, I will just put it on the agenda.


George Alexander Drew: No.


Alphonse Fournier: If you want to have
it next week, that is all right.


Angus MacInnis: Mr. Speaker, I understood
this was a matter of government policy, that the matter was really urgent and that they wanted to do something about the manufacturers' retail prices. If they want to hold it over, we must come to the conclusion that they do not want to do anything about it.


George Alexander Drew: I think we might as well end
any pretence that the government has any real thought that this is an urgent matter or that they ever meant to do anything about it with any expectation that it would do anything to deal with inflation. This has been a pretence from the beginning, and the pretence continues.


George Alexander Cruickshank: You will find out.


Alphonse Fournier: Mr. Speaker, I wish
to announce that tomorrow we will proceed with that government notice of motion.


George Alexander Drew: Mr. Speaker-


Alphonse Fournier: Oh, no.


George Alexander Drew: -I just wish to point out that the house is entitled to know whether or not the government intends to introduce a bill because, since this matter was discussed this afternoon I have seen a communication, about which I have written to the Minister of Justice (Mr. Garson), which suggests that this is to be nothing more than a committee
Business of the House
to deal with an interim report that has been made. Is it the intention to go beyond that, or is it not?


Alphonse Fournier: Mr. Speaker, tomorrow when this government notice of motion comes before the house the leader of the opposition (Mr. Drew) can repeat what he has said tonight. There is now nothing before the house except announcing this and that which will be taken up as the first item tomorrow.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to the order of the house passed on October 26, 1951.
[Stage Direction]
Friday, November 2, 1951